Factors Affecting Consumer Responsiveness to Price Changes 1. Price, quality and availability of substitutes: • Lower price/ higher quality/ greater availability → more likely price elastic • Higher price/ lower quality/ lesser availability → more likely price inelastic 2. Proportion of consumer's budget spend on the good: • Higher the proportion→ elastic • Lower the proportion → inelastic 3. The time consumers have to respond to a price change: • More time to respond → elastic • Less time to respond → inelastic 4. Whether the good is a luxury or a necessity: • Luxury → elastic • Necessity → inelastic