When is demand considered elastic?

Demand is considered elastic when a small change in price leads to a significant change in the quantity demanded by consumers. This concept is rooted in the relationship between price and quantity demanded: when the demand for a product is elastic, it means that consumers are very responsive to changes in price. If the price decreases slightly, a large number of consumers will increase their purchases, and conversely, if the price rises slightly, many consumers will reduce their purchases significantly.

In economics, elasticity is quantitatively measured, and when elasticity is greater than one, it indicates that demand is elastic. This responsiveness is particularly evident in goods that are not necessities or that have many substitutes available, where consumers can easily shift their purchasing behavior based on price fluctuations.