What Determines The Price Of Elasticity Of Demand

1258 WordsNov 5, 20176 Pages
1.) Availability of Substitutes: This is the most important factor of what determines the price of elasticity of demand. Goods or services that have close similar substitutes will typically have more elastic demands associated with them (Jerelin, n.d.). 2.) Proportion of the Consumer’s Income Spent: This is essentially the amount of the consumer’s money that is spent on a particular good or service. The higher the amount of their income that is spent on a good directly influences the elasticity of demand for it. Alternatively, the lower the amount of income spent, the lower a goods elasticity of demand is. 3.) Time: In many instances, including this one, the saying “time is money” applies. When the price of a good changes the elasticity…show more content…
Hospitals could raise their prices for emergency and medical care, however, I do not believe it would have much of an effect of the demand for these services. If someone really needs to be treated by an ED, it is safe to assume they are not going to take the time to find a less expensive hospital as a substitute to receive care at. They are going to need to be seen at the closest facility. Especially when it comes to a life or death situation. I think that emergency services could be considered to be perfectly inelastic. Unless of course, the medical care that was being provided was an elective procedure like plastic surgery. This would be considered an extreme case of price elasticity. During the short run, the number of seats most likely cannot be altered. Unless there are temporary seats that are brought in. Even if a higher price was charged for each seat, there are only a limited set number of seats. So, once the football stadium sells out for a game or concert, that is it. It is at maximum capacity. This would be considered to be a perfectly inelastic supply for a football stadium. As for the long run elasticity of supply for the football stadium, it would remain the same as long as it did not expand and add seating. If they did decide to add additional seating to the football

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