Identify the factors of price elasticity of demand.

(A) Nature of Goods.

(B) Availability of Substitution.

(C) Complementary Goods

(D) Cost of Goods.

Choose the correct answer from the options given below:

Option 1 -> Excludes Complementary Goods (C) which influences demand elasticity through cross-price effects.

Option 2 -> Incorrectly includes Cost of Goods (D) which is not a standard factor of price elasticity.

Option 3 -> Correctly identifies Nature of Goods, Availability of Substitution, and Complementary Goods as key factors.

Option 4 -> Excludes Nature of Goods (A) and incorrectly includes Cost of Goods (D).

Hence, Option 3: (A), (B), and (C) -> The main factors affecting price elasticity of demand are: (A) Nature of Goods - necessities are inelastic while luxuries are elastic; (B) Availability of Substitution - more substitutes make demand more elastic as consumers can easily switch; (C) Complementary Goods - the availability and price of complementary goods affect the demand elasticity of the main product. Cost of goods is not a determinant of price elasticity, rather it's the other factors like income proportion, time period, and consumer preferences that matter. -> correct