Define price elasticity of demand and explain the factors affecting it

Price elasticity of demand (PED) is a measure of the % change in demand of a good which occurs in response to a change in price.There are four main factors which effect PED:availability of substitutes - if a good has many close substitutes, PED is very high. That is to say that a small increase in price would result in a large decrease in the amount of the good demanded.share of total expenditure - if the proportion of a consumer's income taken up by the good is very large, PED will also be large. Whereas if the good takes up a relatively small portion of a person's income, an increase in price will not be as noticeable and so the quantity demanded is unlikely to fall by a lot.time period - in the Short Run, PED is very inelastic, but in the Long Run, as consumers have time to adjust their tastes/ switch to cheaper substitutes/ go to another shop, PED becomes more elasticthe nature of the good - if a good is a necessity, PED will be inelastic, but if it is a luxury, PED will be more elastic.