Running Head: DETERMINANTS OF PRICE ELASTICITY OF DEMANDDeterminants of Price Elasticity of DemandInstitution AffiliationDate:1DETERMINANTS OF PRICE ELASTICITY OF DEMAND2Price Elasticity of demand is a term often used in economic s to determine the sensitivityof price on goods and services. Therefore it is a measure of changes in the quantity demanded ofa certain good resulting from a change in its price. The determinants of price elasticity ofdemand include the degree of necessity. Goods which are a must to have a lower elasticity, thisis because consumers buy them irrespective of the price (Mceachern, 2016). Proportion ofincome spent on goods, products that have a high cost have greater elasticity because theconsumers will shift to their substitutes with lower costs. Goods with more substitutes have agreater elasticity since consumers easily changes from one good to ...
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