Economics Elasticity Of Demand Questions Medium
If the price elasticity of demand is equal to 1, it means that the demand for a product is perfectly elastic. This implies that a small change in price will result in a proportionally larger change in quantity demanded. In other words, consumers are highly responsive to changes in price, and a slight increase in price will cause a significant decrease in quantity demanded, while a slight decrease in price will lead to a substantial increase in quantity demanded. This indicates that the demand for the product is very sensitive to price changes, and consumers have many substitutes available in the market.