Definition
- Elastic demand
- An elastic demand is one in which the elasticity, ignoring its minus sign, is greater than one, showing a high responsiveness to a change in price.
- Not to be confused with: Inelastic demand
- An inelastic demand is one in which the elasticity, ignoring its minus sign, is less than one, showing a low responsiveness to price.
Test yourself
What is the difference between elastic demand and inelastic demand?
Elastic means quantity responds by proportionally more than price; inelastic means by proportionally less.