Which of the following is a major determinant of price elasticity of demand?

1. Analyze the question The question asks for a major determinant of price elasticity of demand (PED), which measures how responsive the quantity demanded of a good is to a change in its price.

2. Explain the concept PED = % change in quantity demanded ÷ % change in price

The main determinants of PED are:

• Availability of substitutes. More substitutes make demand more elastic.
• Nature of the good. Necessities are inelastic and luxuries are elastic.
• Proportion of income spent on the good. A larger share makes demand more elastic.
• Time period. Demand is more elastic in the long run.
• Number of uses of the good.
• Habit or addiction.
• Income level of consumers. This is often listed in Nigerian textbooks. The same price change affects a low-income and a high-income consumer differently, which changes how responsive they are.

3. Check each option

• A. The price of the commodity. Price is the variable that changes in the elasticity formula. It is not a determinant of elasticity itself, so this is wrong.
• B. Availability of factors of production. This affects supply, not the responsiveness of demand, so it is wrong.
• C. The prices of factors of production. This affects cost of production and supply, so it is wrong.
• D. Income of the consumers. This is the only option that relates to the demand side. Consumers' income, and the share of it spent on a good, influences how sensitive they are to price changes, so it fits.

4. Answer The correct option is **D. Income of the consumers. Options B and C are supply-side factors, and A is the variable being measured, so D is the best choice by elimination.

5. Exam tip When a question asks about determinants of demand elasticity, eliminate options about production or supply (factors of production, costs). Look for demand-side ideas such as substitutes, necessity or luxury, income, and time.