Consider some determinants of the price elasticity of demand:

The availability of close substitutesWhether the good is a necessity or a luxuryHow broadly you define the marketThe time horizon being considered

A good without any close substitutes is likely to have relatively demand, since consumers cannot easily switch to a substitute good if the price of the good rises.

A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has theleastelastic demand?

-Diamond necklace

-Chemotherapy for cancer patients

The price elasticity of demand for a good also depends on how you define the good.

Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between.

Categories:

Most Elastic

In Between

Least Elastic

-Boot-cut jeans

-Pants

-Clothing

The price elasticity of demand is also affected by the given time horizon.

Other things being equal, the demand for natural gas will tend to be (less, more, nor less, nor more) elastic in the short run than in the long run.