Main factor affecting price elasticity of demand

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Based on data from the General Household Survey and the Expenditure and Food Survey, researchers from the University of Sheffield estimated an elasticity figure for alcohol of 0.40 in the United Kingdom whilst a figure of between 0.98 and 1.27 was estimated for off-trade beer, ie sold in supermarkets and licenced shops. (Sloman et al; 2018).

In terms of the above statement, using the ONE main factor affecting price elasticity of demand, discuss the reason for the above finding.

With the aid of an example, defend the point that the demand curve for a unit elastic good in terms of price elasticity of demand is hyperbola in shape. Use the unit elastic demand curve and total revenue as the basis for your answer.

Reference no: EM133066528

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