Price elasticity of demand
Degree of necessity: When a good has a high degree of necessity (i.e. the good is more of a need than a want), a change in the price would not have much difference in the quantity demanded for the good, thus having a price inelastic demand. For example, the demand for necessities like food would be more price inelastic compared to the demand for luxuries such as jewellery as consumers are more likely to reduce their demand for luxuries than for necessities. However, goods that are addictive (such as cigarettes and drugs) would be considered as necessities by addicts, thus causing them to have price inelastic demands.