The greater the total value of the price elasticity of demand
The greater the price change's receptiveness to quantity demand (Bas, Mayer, & Thoenig, 2017).
A small change in the price of a good results in a significant change in the volume requested of the product
The amount demanded of the product would decrease if the price of the item increased to X dollars. But, if the product has other equivalents, we would choose cheaper alternatives.
The quantity demanded is affected by changes in the price of the goods
As a result, the product was somewhat elastic in this situation. Consequently, if we spend a high amount of our income in purchasing this product, then any increase in the price of the item will create a problem as we will stop obtaining the item or otherwise try to buy lower quantities of the product (Galperin, & Ruzzier, 2013). Hence, this shows that the product is relatively elastic in demand. Conversely, if we spent a little amount of our income on the product, then it would have been relatively inelastic.
If the type of the product is essential good
such as medicines and food, it would be difficult for me to stop buying the good. This would create an inelastic demand as regardless of the rise in the price will not stop people from buying but curtail the consumption (McConnell, Brue, & Flynn, 2012).
Similarly, if the product is a luxury
there would be a substantial decrease in the demand for the product causing a higher elasticity.
If the product is top-rated and only available online
the increase in the rise in the popularity of purchasing online will enable persuasion to the customers to continue buying the item regardless of the increase in the price. This will lower the elasticity.
References
Bas, M., Mayer, T., & Thoenig, M. (2017). From micro to macro: demand, supply, and heterogeneity in the trade elasticity. Journal of International Economics, 108, 1-19.
Galperin, H., & Ruzzier, C. A. (2013). Price elasticity of demand for broadband: evidence from Latin America and the Caribbean. Telecommunications Policy, 37(6), 429-438.
McConnell, C., Brue, S., & Flynn, S. (2012). Microeconomics (2nd ed.). New York: McGraw-Hill/Irwin.
