Elastic Demand vs Inelastic Demand
Elastic Demand and Inelastic Demand are two Elasticity concepts in AP Economics that students often mix up. In short: elastic demand is elastic demand is when the quantity demanded changes more than the price changes. Meanwhile, inelastic demand is inelastic demand is when the quantity demanded changes less than the price changes. Here is how they compare side by side.
Elastic demand is when the quantity demanded changes more than the price changes.
In elastic demand, the percentage change in quantity demanded is greater than the percentage change in price. This means that consumers are very sensitive to price changes. Goods with many substitutes, such as luxury goods, often have elastic demand.
Inelastic demand is when the quantity demanded changes less than the price changes.
In inelastic demand, the percentage change in quantity demanded is less than the percentage change in price. This means that consumers are not very sensitive to price changes. Goods with few substitutes, such as necessities, often have inelastic demand.