ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Many factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes. High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.

Detailed explanation-2: -If a price change for a product causes a substantial change in either its supply or its demand, it is considered elastic. Generally, it means that there are acceptable substitutes for the product.

Detailed explanation-3: -Ease of switching: if production of goods can be varied, supply is more elastic. Ease of storage: when goods can be stored easily, the elastic response increases demand. Length of production period: quick production responds to a price increase easier.

Detailed explanation-4: -Determinants of price elasticity of supply include the length of the production period, the availability of spare capacity, ease of switching production, market entry barriers, time scale, and the ease of accumulating stocks.