Identify and explain 2 factors that influence price elasticity of demand

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Nature of Commodities.

In creating nations of the world, the for every capital pay of the individuals is by and large low. They use a more noteworthy measure of their salary on the buy of necessaries of life, for example, wheat, milk, course fabric and so forth. They need to buy these items whatever be their cost. The interest for merchandise of necessities is, along these lines, less versatile or inelastic. The interest for extravagance products, then again is enormously versatile. Case in point, if the cost of burger falls, its request in the urban communities will go up.

Availability of substitutes.

if a decent has more prominent number of close substitutes  accessible in the business, the interest for the great will be incredibly flexible. For samples, if the cost of Coca Cola climbs in the business, individuals will switch over to the  utilization of Pepsi Cola, which is its nearby substitute. So the interest for Coca  Cola is flexible.

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UT Austin

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