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Classification of Demand Elasticity: Elastic vs. Inelastic
Demand is categorized as 'elastic' when its price elasticity is greater than one, indicating that a 1% price increase causes a proportionally larger (more than 1%) decrease in quantity demanded. Conversely, demand is 'inelastic' when its elasticity is less than one, meaning a 1% price increase results in a proportionally smaller (less than 1%) drop in demand.
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Ch.1 The supply side of the macroeconomy: Unemployment and real wages - The Economy 2.0 Macroeconomics @ CORE Econ
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