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Questions
When is the demand for a commodity said to be elastic?
What is meant by elastic demand?
Solution 1
Demand is considered to be elastic when a little change in price causes an indefinitely large change in the amount desired of a good. A minor increase in the seller's price will reduce demand for the good to zero, whereas a slight decrease in the price will cause such a large increase in demand for the commodity that no seller will be able to meet the demand at the decreased price. In such a case, the demand curve is a straight line parallel to the X-axis.
Solution 2
When the percentage change in demand is greater than the percentage change in price, demand is known as elastic demand.
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RELATED QUESTIONS
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