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Factors affecting price elasticity of demand

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Factors affecting price elasticity of demand are:
1. Number of close substitutes within the market - The more (and closer) substitutes available in the market the more elastic demand will be in response to a change in price.
2 Specific nature of Good - Necessities tend to have a more inelastic demand curve, whereas luxury goods and services tend to be more elastic.

3. Percentage of income spent on a good - It may be the case that the smaller the proportion of income spent taken up with purchasing the good or service the more inelastic demand ...

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Response discusses the Factors affecting price elasticity of demand

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