ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the availability of substitutes
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the time period involved
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the ease with which resources can be shifted to and from the production of this good to other uses
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whether the good is a luxury or neccessity
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Detailed explanation-1: -Answer and Explanation: The determinants of the price elasticity of demand of a particular commodity include all of the following, except C. the ease with which resources can be shifted to and from the production of this commodity to other uses. This would be a factor of elasticity of supply rather than demand.
Detailed explanation-2: -The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed. If income elasticity is positive, the good is normal.
Detailed explanation-3: -The Price Elasticity of Demand is affected by many factors. 5 crucial factors among them are: Availability of goods, Price Levels, Income Levels, Time Period, and Nature of goods.
Detailed explanation-4: -Answer and Explanation: The correct answer is b. the steepness or flatness of the supply curve for the good.
Detailed explanation-5: -The correct option is (c) The availability of close substitutes.