Price Elasticity

There are several factors that affect the charge duck soup of requirement for a product:
The number of close substitutes for a inviolable
The more close substitutes in the market, the more tensile is demand because consumers can easily switch their demand if the price of star product changes relative to others.
The strength of the brand loyalty to a product
Products which build strong consumer brand loyalty often have relatively inelastic demand - consumers are prepared to consume price increases because of other attractive features of the brand which mean they volition stay loyal. Conversely, a product with little or no brand loyalty will find demand is elastic - consumers are prepared to quickly switch to an alternative if the price increases
The cost of switching amidst products
There may be significant costs involved in switching between products. In this case, demand pitchs to be relatively inelastic. For example, mobile recollect service providers may insist on 12 or 18-month contracts being taken out.  Some gym memberships require a 3-6 month notice period for cancellation.
The degree of necessity or whether the beneficial is a luxury
Goods and services deemed by consumers to be necessities (e.g. bread, milk) feed to have an inelastic demand whereas luxuries tend to have a more elastic demand.




The percentage of a consumers income allocated to outgo on the good
Goods and services that take up a higher(prenominal) proportion of a households income will tend to have a more elastic demand than products where large(p) price changes makes little or no difference to mortals ability to purchase the product.
The time period allowed side by side(p) a price change
Demand tends to be more price elastic, the longer that we allow consumers to respond to a price change.
Whether the good is subject to habitual consumption
When this occurs, the consumer becomes less sensitive to the price of the good in question because their default position is to buy the comparable products at regular intervals.
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