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Price elasticity of demand for a commodity tends to be greater ⦁ The more of a...

Price elasticity of demand for a commodity tends to be greater

⦁ The more of a necessity it is

⦁ The better substitutes there are for it

⦁ Over shorter time period

⦁ The lower the price

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Answer #1

Price elasticity of demand is in general terms is the ratio of percentage change in the quantity demanded to the percentage change in the price

it simply tells that whether the good is elastic or in elastic

if the demand is elastic then the consumers are price sensitive because of presence of more substitutes

the value of price elasticity of demand for an elastic good is greater than 1

the value of price elasticity of demand for inelastic demand is less than 1

so it can be clearly said that the price elasticity of demand of a commodity will be greater if it has more substitute present because the demand will be elastic in nature

whether the good is a necessity or a luxury is calculated by the help of income elasticity of demand

so the correct answer here is option B

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