Question

^{What are the determinants of a price elasticity of demand? Name three of them and
explain the intuition clearly.}

Answer 1

Determinants are the reason for the variation of demand for the goods. They can move or shift the demand curve according to the respective changes

Three of them are-

1. TASTE AND PREFERENCES-Due to many factors like advertisements, fashion change, new technology, the quantity demand for a product can be incresed or decreased accordingly

2. INCOME-It is one the important determinant for the quantity demand is the income of the consumer because as the income rises then quantity demanded will be more even when there is a little bit of price change

3.AVAILABILITY OF SUBSTITUTES- When there is the replacement of one item with other, then if there are increase in price of item a then quantity demand for item b will increase and vice versa .for example tea and coffee.