What is meant by price elasticity of demand ? Explain any 2 factors th

1.	What is meant by price elasticity of demand ? Explain any 2 factors that affect it.
Answer» <html><body><p></p>Solution :Price Elasticity of Demand is defined as the responsiveness of quantity demanded to a change in price.FACTORS AFFECTING ELASTICITY OF DEMAND1. Nature of the Good:The elasticity of demand for a good depends upon the nature of the good, i.e., whether the good is a necessary or a luxury good. The elasticity of demand for a necessary good is relatively small. For example, if the price of such a good rises, its buyers generally are not able to reduce its demand.2. Availability of Substitute <a href="https://interviewquestions.tuteehub.com/tag/goods-1009877" style="font-weight:bold;" target="_blank" title="Click to know more about GOODS">GOODS</a>:If close substitutes for a particular good are available in the market, then the demand for the good <a href="https://interviewquestions.tuteehub.com/tag/would-3285927" style="font-weight:bold;" target="_blank" title="Click to know more about WOULD">WOULD</a> be relatively more elastic. For example, since tea, a close substitute for coffee, is available in the market, a rise in the price of coffee would result in a <a href="https://interviewquestions.tuteehub.com/tag/considerable-929884" style="font-weight:bold;" target="_blank" title="Click to know more about CONSIDERABLE">CONSIDERABLE</a> fall in its demand and a consequent rise in the demand for tea.</body></html>

What is meant by price elasticity of demand ? Explain any 2 factors that affect it.