Question

3. What do economists mean when they say that the demand is elastic? Interpret what it means when the magnitude of the price elasticity of demand/supply is greater than, less than, or equal to 1.

Answer 1

3):-elasticity of demand and s defined as a consumers' responsiveness or sensitivity to changes in price

When economist say demand is elastic it means demand change a lots when price change.

when the magnitude of the price elasticity of demand/supply is less than, 1 it is called inelastic which is relatively unresponsive to price charges

when the magnitude of the price elasticity of demand/supply is greater than 1 it is called elastic which is responsive to price changes

when the magnitude of the price elasticity of demand/supply is equal to 1.it is called unitary elastic in which demand whose elasticity is exactly equal to 1

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