Factors of flexibility

   DETERMINANTS OF ELASTICITY 

                 Elasticity means ability to adapt the change. Elasticity is also called as flexibility. Determinants means element that helps to take a decision. 

     DETERMINANTS OF ELASTICITY OF DEMAND:- 

         1) PRICE OF OWN GOOD:   If the price of good decreases then the demand will be more. If the price of good increases demand will be less. 

    

        2) PRICE OF SUBSTITUTES:  If price of a good increases then the demand for a substitute good increases and vice versa.  Example if the price of a coffee increases then the demand demand for tea increases. 

      3) INCOME OF CONSUMERS:  Demand also depends upon the income of buyers/consumers. 

      4) TASTES  :  Tastes and preferences also matters for a demand of a good. 

      5) ADVERTISING OTHER PROMOTIONAL MEASURES:  If the good is advertised or promoted in a great way then the demand for the good may increase. 

    DETERMINANTS OF ELASTICITY OF SUPPLY:-

      1) FLEXIBILITY OF INPUTS:  Ability of change in the goods they produce 

 

      2) MOBILITY OF INPUTS:  Ability to move inputs from one use to another. 

      3) TIME:  Time is the most main factor of elasticity of supply. Elasticity of supply defers long run  to short run. 

      4) SUBSTITUTE INPUTS:  Ability to produce substitute inputs.