Elastic demand
Definition. Demand is described as price elastic when the quantity demanded of a good responds more than proportionately to a change in its price, giving a price elasticity of demand greater than one in absolute value. A small percentage price change therefore causes a larger percentage change in quantity demanded.
When demand is price elastic, a fall in price raises total revenue while a rise in price lowers it, because the quantity effect outweighs the price effect.
This term belongs to Price Elasticity of Demand and Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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