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Factors influencing the price elasticity of demand
The price elasticity of demand for a particular demand curve is influenced by many factors:
The availability of substitutes at the market price
The first factor is obvious; price. When the price of a commodity goes up, it becomes relatively more expensive than other goods. If consumers can easily find a good substitute for a product whose price increases, they will switch quick. ...
The availability of other substitutes
The substitution effect indicates that, when the price of a commodity rises, consumers will tend to find other substitutes for that good in order to fulfill their needs which will be more inexpensive.
Approximate Word count = 452
Approximate Pages = 1.8
(250 words per page double spaced)
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