how is the price elasticity of demand affected by : a) number of substitutes available for the good b) nature of good ?
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a) when the number of substitutes are high, people have the more choice between the products so there power to fluctuate the price gets high and price elasticity increases
b) The nature of good is important in determining the price elasticity. When the products are very important and there is no chance to eliminate them than the customer do not bargain against the price so the price elasticity decreases.
b) The nature of good is important in determining the price elasticity. When the products are very important and there is no chance to eliminate them than the customer do not bargain against the price so the price elasticity decreases.
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