Answer to Question #261377 in Management for jean

Question

When we say elasticity of demand and supply, what is the first thing that comes to your mind? Explain your answer.

Answer 1

What comes to my mind is that the absolute value if demand is greater than 1. An elastic demand is one in which the change in quantity demanded due to a change in price is large. If the formula creates an absolute value greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the value is less than 1, demand is inelastic.