Revision 05

If a consumer’s willingness to demand a product is sensitive to a change in the price, then their elasticity of demand is elastic, or  inelastic?

Definition

Elasticity measures consumers’ sensitivity to price changes.

Example

If consumers change their demand by a large amount when the price changes by a small amount, then consumer demand is elastic. If consumer demand changes by only a small amount when price changes, then it is inelastic. So, in the case of this question, demand is elastic.