Glossary · Micro · Elasticity

Elastic demand

Demand where quantity responds more than proportionally to price, so PED is greater than 1. Goods with close substitutes, like a particular brand of sneakers, tend to have elastic demand and a flat-looking curve.

Taught in: Elastic vs Inelastic — and How to Calculate

Related terms

Inelastic demandPrice elasticity of demand (PED)Total revenue test

More from elasticity

Cross-price elasticity of demand (XED)Determinants of PEDDeterminants of PESIncome elasticity of demand (YED)Luxury goodMidpoint formulaPerfectly elastic demand

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