Answer to Question #325107 in Microeconomics for Munia

Question

The intent of this exercise is to get students to think aboutvarying degrees of elasticity and the factors that determine demand elasticity.

Answer 1

The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed.