Answer to Question #310197 in Microeconomics for joseph

Question

Discuss 2 determinants each of the price elasticity of demand and the price elasticity of supply

Answer 1

Some of the factors that affect price elasticity of demand are

(1) availability of substitutes,

(2) if the good is a luxury or a necessity

The two determinants of price elasticity of supply are;

1) Production time period

2) The availability of factors of production.