But, poor people are highly affected by increase or decrease in the price of goods. Download these elasticity notes here. Factors affecting income elasticity of demand - NewsAndStory 9 Factors Influencing the Elasticity of Demand - Scholarszilla . (E.g. - Habit-forming goods such as cigarettes tend to be more inelastic (since consumers become addicted to them, they will be less responsive to any price changes). The income elasticity of demand measures how the change in a consumer's income affects the demand for a specific product. What is Income Elasticity of Demand? Types, Formula, Example, Factors The text also includes many current examples, including; the Keystone Pipeline, Occupy Wall Street, and debates over the minimum wage. Assuming prices of all other goods as constant, if the income of the consumer increases by 5% and as a result his purchases of the commodity increase by 10%, then E = 10/5 = 2 (>1). Income Elasticity of Demand Definition - Investopedia Apple iPhone Price Elasticity of Demandd - UKEssays.com There are 4 factors that influence the price elasticity of demand: - The availability of substitutes. Determinants of price elasticity of demand - Khan Academy Availability of close substitutes If a good has a lot of close substitutes its demand will be relatively elastic. Availability of substitute goods: More substitutes translates to a more elastic demand. Concept of Elasticity of Demand. Examples include food in general, electricity and water. Elasticity of Demand - Definition, Types, Solved Examples and FAQs Describe how each of the 4 factors . Examples include food in general, electricity and water. Discuss factors affecting the Price Elasticity of Demand, Income Elasticity of Demand, and Cross-price Elasticity of Demand for LUX, a five-star resort in the Maldives. Time horizon: generally, it is time-consuming to find alternative goods, and hence, the more time utilized, the more elastic the demand is. Factors Affecting Price Elasticity Of Demand | Economics