Question

Which of the following is not a determinant of a good’s price elasticity of demand?

Select one: a. The slope of the demand curve b. The share of the good in the consumer’s total budget c. Whether the good is a luxury or a necessity d. The passage of time

Answer 1

Determinant in simple terms is the factor which affects the outcome of something

Here something is price elasticity of demand

Price elasticity of demand shows relationship between price and quantity demanded whether the demand is elastic or inelastic or unit elastic in nature

Some of the determinants that affect the price elasticity of demand are-

• presence of substitutes in the market
• time horizon like the demand will become elastic in the long run
• Whether the good is a necessity or luxury
• total budget of the consumer in which if the income spent on the good is high then price elasticity of demand is also high

Here slope is not the determinant

Slope is the ratio of change in price to thr change quantity demanded

So it is not a determinant

Answer is option a