The Availability of close Substitutes-For an example, if the prices of Pizzahut were to

increase sharply, many consumers would turn to other kinds of pizza shop instance Domino
and as a result the quantity demanded of Pizzahut will decline very much. On the other hand,
if the price of Pizzahut falls, many consumers will change from other pizza shop to Pizzahut.
Secondly, the demand for Pizzahut is elastic. It is the availability of close substitutes that
makes the consumers sensitive to the changes in the price of Pizzahut and this makes the
demand for Pizzahut elastic. Likewise, demand for common salt is inelastic because good
substitutes for common salt are not available.

Importance in consumer budget-Price of other goods affects demand of Pizza Hut. If price
of pizza in Pizza Hut increases, consumer will find other alternative. However, demand of
Pizza Hut will decreases. The next factors that affect demand of Pizza Hut is consumer
income. Other things being equal, when income increases, consumer’s demand for more
goods and services will increase. Thus, when consumer income increase, the demand for
Pizza Hut will also increases. Taxation also affects demand of Pizza Hut. The higher the
taxes that charged in Pizza Hut, the lower the purchasing power of consumer. This will
decreases the demand of Pizza Hut.

Definition of the Commodity- The value of the price elasticity coefficient also depends on
how narrow or extensive the scope of the definition of the commodity. Food is a very wide-
ranging project for human consumption, and the demand for food is inelastic because it has
no reliable alternatives. Therefore, if the price of a particular type of food increases, the
demand for other varieties will increase. This explains why the demand for synthetic fibers is
more flexible than the average clothing demand. The narrower the definition of the
commodity, the larger the range of alternatives and the higher the value of the elastic
coefficient.