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Effect Of Price Elasticity Of Demand

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INTRODUCTION
Economists use a measure of responsiveness called elasticity. Elasticity means how much something will stretch or change in response to another variable. Basically, Elasticity is the ratio of the percentage change in a dependent variable to a percentage change in an independent variable. There are different kinds of economic elasticity. For example, price elasticity of demand, price elasticity of supply, income elasticity of demand, and cross-price elasticity of demand. But here we are focusing on the price elasticity of demand, so what does price elasticity of demand means: Price elasticity of demand is the most common measure used to determine consumers’ sensitivity to price. “Price elasticity of demand (PED) identifies the relationship between changes in quantity demanded and changes in price: the degree to which quantity demanded responds to a change …show more content…

Usually, Quantity demanded varies with the price, how much consumers are price sensitive to the cigarette demand and what are the factors which impact on the price elasticity of cigarette demand. Here we are discussing the five factors which effects the price elasticity of demand. These contains the prices of related goods (substitutes and compliments), income of the buyers, buyers’ expectations, the number of buyers, and buyers’ preferences. Briefly we are discussing the factors which has been playing a major role in regarding the increases of cigarette

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