Demand for goods can be both elastic and inelastic. Why did it happen? It is these factors that influence it.
a. Principal whether or not the goods. Demand for staple goods such as rice and cooking oil are generally less affected by rising or falling prices. This is because any increase, people continue to buy rice because rice is a staple that should always met their needs. Similarly, when the price drops, people do not then buy up the rice as much as possible. He will buy according to the magnitude of the needs of families within a certain time. Thus, the subject of a goods then permintannya more inelastic.
b. Presence or absence of substitute goods (substitution). Availability of substitutes has led to a good high level of elasticity. However, it’s easy to substitute an item, the more inelastic demand. For example, cow’s milk has soy milk substitutes. If the price of cow’s milk rises, people will buy soy milk. Thus, the demand for cow’s milk is elastic.
c. The proportion or part of income spent on goods. The greater the proportion of income consumers to purchase any item, the more elastic the demand. If the proportion of income spent on goods was small, demand is more inelastic. For example, the decline in the price of the refrigerator caused the people will soon make a purchase on the refrigerator. The proportion of revenues to the high amount refrigerator so that when there are price reductions refrigerator, demand will rise dramatically.
d. Tradition or habit. If the use of an item has become a tradition or habit, the demand will be inelastic. Although the price goes up, consumers will still buy it.
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