Question

What are the factors affecting elasticity of supply and elasticity of demand?

Answer 1

Various factors which affect the elasticity of demand of a commodity are:

Nature of commodity:Availability of substitutes:Income Level:Level of price:Postponement of Consumption:Number of Uses:Share in Total Expenditure:Time Period:

Answer 2

Factors affecting Elasticity of Demand are:-

*Nature of Commodity- Necessities - Less Elastic .

                                                             comfort- Elastic.

                                                             Luxuries - More Elastic.

*Availability of close Substitutes - Good having number of close Substitutes will have an Elastic demand & good with no close substitute will have an inelastic demand.  

*Number of uses- More the number of uses a commodity can be put to- more elasticity is the demand and vice versa.

*Habit- If you are are Habituated to a particular good, Elasticity will be less and vice versa.