Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • Number of substitutes • Whether the good is a necessity or a luxury • Percentage of one's budget spent on the good • Time horizon being considered A good with many close substitutes is likely to have relatively substitutes if the price of the good rises. demand since consumers can easily choose to purchase one of the close A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? Chemotherapy for cancer patients Yacht