What are the factors affecting the price elasticity of demand?

1) The availability of substitutes: The greater the number of substitutes, the more elastic the good. As consumers can easily switch to consuming other goods if the price of one good rises.

2)The degree of necessity: If a good is a necessity, consumers will be more willing to pay higher prices for that good. Making the demand more inelastic for good consumers deem to be a necessity. An example of this is the demand for oil.

3)Time period considered: Goods tend to be more elastic over the long run because consumers have more time to adjust their behavoir.

4)Proportion of the purchaser's budget consumed by the item: Goods that represent a large portion of the purchaser's budget tend to have greater elasticity.