Question

When is the demand for a commodity said to be elastic?

Answer 1

The demand for a commodity is said to be elastic when a commodity’s demand is considered to be elastic when the quantity demanded responds highly to price changes. This circumstance happens when a small percentage change in price causes a proportionally bigger percentage change in the amount desired by consumers. Mathematically, this means that the absolute value of the price elasticity coefficient (E_d) is strictly greater than one (E_d  > 1).