OWhat is the definition of price elasticity of demand Essay

OWhat is the definition of price elasticity of demand - Essay Example The formula for the co-efficient of price elasticity of demand for a good is Factors that determine the PED are the ability of a consumer after a price change to postpone consumption decisions that concern the good and to search for substitutes. Among others include the availability of substitute’s goods in the market structure, where the more the close the substitutes are then, the higher and the elasticity. People can simply switch from one good to the other due to a minor change in price therefore availability of close substitutes have a great effect on demand inelastic (Cohen, 2001). Others include the consumer percentage of income that the product’s price represents as people will tend to pay more interest when purchasing the good because of its cost. Others include the necessity of a good, brand loyalty and the duration that the price change holds in the market (Jehle,