Factors Affecting Price Elasticity of Demand

We go over a number of factors which affect whether a good or service is price elastic or inelastic.

There are lots of factors affecting price elasticity of demand (PED), but these are some of the key ones.

Number of substitutes
More substitutes - more elastic

Breadth of definition
More specific - more elastic

Essential or non-essential
Less essential - more elastic

Addiction
Less addictive - more elastic

Percentage of income spent on good
Larger proportion of income - more elastic

Number of uses
Fewer uses - more elastic

Time
Longer time period - more elastic

Ease of switching
Easier to switch - more elastic

Check out the Introductory Economics playlist for more videos like this!

Subscribe for more videos looking at everything to do with the subject of economics. Put suggestions for video ideas in the comments section below and any feedback offered would be greatly appreciated.