An Overview of Factors that Affect the Price Elasticity of Demand
This post will help you to further enhance your understanding of factors affecting the price elasticity of demand, as part of your Prelim Economics course. There are many factors that affect the price elasticity of demand, including:
- Necessities and luxuries;
- The existence of close substitutes;
- The proportion of one’s income spent on the good or service; and
- The length of time since a price change.
The video below explains these factors in more detail.