Question

What are the Conditioning factors of elasticity?

Answer 1

Elasticity is the degree of responsiveness of the change in quantity demanded or supplied with respect to the change in price.

There are so many factors which affect the elasticity, some of them are-

1.Nature of goods which means whether they are a luxury, normal or inferior goods

2. Availibility of substitutes in the market because if a substitute is there then change in the price of one item will affect the demand of the other.

3.Income of consumers which also plays an important role to to the demand of the item in the market. If income is more then they will not prefer to consume inferior goods.

4. Complementary goods means one item demand depend on other so if the demand for bread is high then butter demand will also rise due to theur complement in nature.