Briefly explain the 4 main factors that can influence elasticity of demand. Explain examples in your own words.

Sure, here are the four main factors that can influence the elasticity of demand:

1. Availability of Substitutes: This is the most significant factor affecting the elasticity of a good or service. In general, the more substitutes, the more elastic the demand will be. For example, if the price of Coca Cola increases significantly, people might switch to Pepsi. Therefore, Coca Cola's demand is relatively elastic.

2. Necessity or Luxury: Necessities tend to have inelastic demand, while luxuries have more elastic demand. For instance, the demand for insulin, a life-saving drug for diabetics, is inelastic because it's a necessity. On the other hand, the demand for a luxury car is elastic because if the price goes up significantly, people might not buy it.

3. Proportion of Income: If the price of a good represents a large portion of a person's income, the demand is likely to be elastic. For example, a rise in housing prices will significantly affect demand because it takes up a large proportion of most people's income.

4. Time: The longer a price change holds, the more elastic the demand becomes. This is because consumers can find substitutes or change their behavior over time. For example, if gas prices remain high for a long period, people might switch to public transportation, making the demand for gas more elastic over time.