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Discuss various factors that affect price elasticity of demand .

Answer» <html><body><p></p>Solution :Availability of Substitute Goods:If close substitutes for a particular good are available in the market, then the demand for the good would be relatively more elastic. For example, <a href="https://interviewquestions.tuteehub.com/tag/since-644476" style="font-weight:bold;" target="_blank" title="Click to know more about SINCE">SINCE</a> tea, a close substitute for coffee, is available in the market, a rise in the price of coffee would result in a considerable <a href="https://interviewquestions.tuteehub.com/tag/fall-983217" style="font-weight:bold;" target="_blank" title="Click to know more about FALL">FALL</a> in its demand and a consequent rise in the demand for tea.2. Price of the Good:The elasticity of demand for a good also depends on its own price. As price changes, quantity <a href="https://interviewquestions.tuteehub.com/tag/demanded-7675308" style="font-weight:bold;" target="_blank" title="Click to know more about DEMANDED">DEMANDED</a> of the good changes, owing to the law of demand. Also, at different <a href="https://interviewquestions.tuteehub.com/tag/prices-1165311" style="font-weight:bold;" target="_blank" title="Click to know more about PRICES">PRICES</a> of the product, i.e., at different points on the demand curve for a good, the <a href="https://interviewquestions.tuteehub.com/tag/coefficient-920926" style="font-weight:bold;" target="_blank" title="Click to know more about COEFFICIENT">COEFFICIENT</a> of price-elasticity of demand for the good would be different</body></html>


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