Explain what determines price elasticity of demand. Discuss how it impacts a firm's strategy.
Price elasticity is the assessment of the interplay that exist whenever there is a change in quality required of a given good and the change in its price. There are several factors that determine price elasticity and they include, price level, income level, period of time, number of uses, availability of substitute and share total expenditure. Elasticity has the capacity to impact on affirm strategy since an in elastic demand permits increased mixed pricing including proportional discounting.