The following factors influences the price elasticity of demand
:
Availability of substitutes: If a good has large number of
substitutes available, then the good has higher elastic demand and
if it has low substitutes available, then the demand for it is
relatively inelastic.
Uses of a good: If a good has large number of uses, then the
elasticity for the good would be elastic. The demand for
multi-use goods is more elastic as compared to single-use
goods.
Distribution of income: If a consumer has higher income levels,
then the demand for goods by that consumer will be inelastic
whereas if it has lower income level, then the demand for the goods
will be elastic.
Time horizon: In the long run, the demand for the goods are
relatively more elastic because consumer find it easy to shift
their consumer patters. While in the short run, the demand for the
goods are inelastic.