Question : Assertion: The price elasticity of demand for a product is higher in the long run compared to the short run.

Reason: In the long run, consumers have more time to adjust their consumption patterns and find substitutes, leading to greater price sensitivity.

Option 1: Both the assertion and reason are correct and related.

Option 2: Both the assertion and reason are correct but not related.

Option 3: The assertion is correct, but the reason is incorrect.

Option 4: The assertion is incorrect, but the reason is correct.

Correct Answer: Both the assertion and reason are correct and related.

Solution : The correct answer is (A) Both the assertion and reason are correct and related.

The assertion states that the price elasticity of demand for a product is higher in the long run compared to the short run. This is correct. In the long run, consumers have more time to adjust their consumption patterns, find substitutes, and respond to changes in price. This increased flexibility and adaptability lead to greater price sensitivity, resulting in a higher price elasticity of demand.

The reason provided states that in the long run, consumers have more time to adjust their consumption patterns and find substitutes, leading to greater price sensitivity. This reason supports the assertion. When consumers have more time, they can explore alternative products or adjust their purchasing habits in response to changes in price. This greater flexibility allows them to be more responsive to price changes, making the demand for the product more elastic in the long run.

Therefore, both the assertion and reason are correct and related. The price elasticity of demand is indeed higher in the long run compared to the short run, as stated in the assertion, and the reason explains why this is the case by highlighting how consumers' ability to adjust their consumption patterns and find substitutes increases price sensitivity in the long run.