Define the term "elastic demand"
Elasticity of demand is the percentage change in demand quantity divided by the percentage change in price. If demand is very elastic it means that it is very sensitive to changes in price. A price change of 1 price unit will result in a proportionally larger change in demand. The demand curve (price quantity diagram) has a small slope that is smaller than 45 degrees.
LF
Related Economics A Level answers
All answers ▸What is a budget deficit?
Describe the impact of a close competitor lowering the price for their good has on the price and output of a firm, use a demand-supply diagram to help explain your answer.
Using a graph, provide reasons for the placement of a sales tax on alcohol. (5 marks)
What is cost push inflation?