What determines how elastic (or inelastic) the demand for a good is?
1. The number of available substitutes for a good. If there are no good substitutes for a good, the demand for the good is likely to be inelastic. Also, it is likely that the demand for specific brands of the same product will be more elastic than the demand for the product itself. For example, the demand for Pepsi will be more elastic than the overall demand for cola. 2. Necessity or luxury. If a good is a luxury, the demand for that good will be more elastic than the demand for a necessity. The demand for insulin is inelastic (as is the demand for food and housing) while the demand for restaurant meals or luxury cars will be elastic. 3. Period of time. As you have more time to find substitutes for a good, the demand for that good will become more elastic. In the immediate period, the demand for many goods will be inelastic, but as time goes on and substitutes are developed, demand becomes more elastic. (The demand for gasoline is like this, in the short term, it is difficult to reduc
