Factors affecting price elasticity of demand
Elastic demand for luxuries
There is elastic demand for luxuries. When prices go up the people buy small quantity of luxury goods. In case of decrease of in prices people buy more quantity of such goods.
Elastic demand for substitutes
The demand for a commodity is elastic if it has close substitutes. There is inelastic demand for goods if there is no close substitutes.
Elastic demand for several uses
A product may have several uses. There is elastic demand for such commodity. In case of single use there may be inelastic demand.
Elastic demand for deferrable goods
The use of a commodity may be deferrable for the next period. There is elastic demand for such commodity. When consumer is unable to postpone its consumption then demand is inelastic.
Inelastic demand for costly goods
Certain goods may have high prices. There is inelastic demand for costly goods. The rich people buy it for pride and prestige.
Inelastic demand for necessaries
Many commodities are included in necessaries of life. There is inelastic demand for necessaries of life. The people buy such goods in order to keep life and soul together.
Inelastic demand for fashionable goods
There are many goods like clothes, shoes and jewelry which are included in fashionable goods. The people like to have fashionable goods. The demand for fashionable goods is inelastic.
Inelastic demand for cheaper goods
Many commodities are cheaper in price. The total cost of such items is nominal in total expenditure. There is inelastic demand for these items.
Inelastic demand for high income
There is inelastic demand for rich people for high quality products as expenditure on such products are nominal part of total income. The demand is elastic for same products for poor people.
Inelastic demand for durable goods
There are many durable goods. The televisions, refrigerator and car are durable in nature. The demand for durable goods is inelastic.
Inelastic demand for short period
The demand products may for short period. It is considered as inelastic demand. The life of milk is very short.
Inelastic demand for complementary goods
There are certain goods that are complementary. The use of such goods depends upon use of main commodity. There is inelastic demand for complementary goods. The petrol is used in a car as complementary good.