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Question
Write short note on 'factors determining elasticity of demand'.
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Solution
The elasticity of demand measures how sensitive the quantity
demanded of a good or service is to changes in other variables.
Various factors which affect the elasticity of demand of a commodity are:
- Nature of commodity:
- Availability of substitutes:
- Income Level:
- Level of price:
- Postponement of Consumption:
- Number of Uses:
- Share in Total Expenditure:
- Time Period:
The elasticity of demand measures how sensitive the quantity
demanded of a good or service is to changes in other variables.
Various factors which affect the elasticity of demand of a commodity are:
- Nature of commodity:
- Availability of substitutes:
- Income Level:
- Level of price:
- Postponement of Consumption:
- Number of Uses:
- Share in Total Expenditure:
- Time Period:
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