When demand for a product changes because of its price, this product is said to be elastic.

Question 1 options:

True

False

The correct answer is True

Explanation:

In the economy and related fields, elasticity is determined by whether there are changes in the demand for a product or service if the price of it increases or decreases. This implies a product is said to be elastic if people demand more or less of the product according to the price or inelastic if the demand is the same.

For example, electricity is an inelastic product because this is paid for most people despite changes in its price, which means demand is stable; on the other hand, beauty treatments are an elastic service because if the price reduces there is more demand and if it increases the demand reduces. Thus, it is true when demand for a product changes due to price the product is elastic.

False! Elastic is when the demand for a product stays the same despite price.