Question

What accounts for the differences in elasticity?

Answer 1

Talking about difference in elastic of demand since it is not mentioned which type of elasticity.

Elasticity is different for different goods. They depend on variety of factors such as necessity, brand name, tastes , number of uses etc.

1) if a good is a necessity then the elasticity of its demand is very low because change in the price of that good will not change the quantity demanded by a huge amount.

2) if there are many substitutes available for a good then it's elasticity will be lower because consumers can easily use other good if it's price rises.

3) income will also determine the elasticity of a good. Person with a higher income will not care much about the prices and will have a lower elasticity of demand whereas a person with lower income will have a higher elasticity of demand.