Factors affecting Elasticity



Elastic means flexible demand and Inelastic means Fixed demand.


  • Availability of substitutes
  • Postponement of consumption
  • Proportion of expenditure (needles: inelastic; TV: elastic)
  • Nature of the commodity (necessity vs. luxury)
  • Different uses of the commodity (paper vs. ink)
  • Time period (elastic in the long term)
  • Change in income (necessaries: inelastic)
  • Habits
  • Joint demand
  • Distribution of income
  • Price level (very costly & very cheap goods: inelastic)

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