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QuestionEconomics

What is the difference between elastic and inelastic demand?
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Step 1
I'll solve this economics problem by explaining the key differences between elastic and inelastic demand:

Step 2
: Define Demand Elasticity

Ed=%Change in Quantity Demanded%Change in PriceE_{d} = \frac{\% \text{Change in Quantity Demanded}}{\% \text{Change in Price}}
Demand elasticity measures how sensitive the quantity demanded of a good is to changes in its price. It is calculated using the formula:

Final Answer

The primary difference between elastic and inelastic demand is the degree of consumer sensitivity to price changes, with elastic demand showing significant quantity changes and inelastic demand showing minimal quantity changes in response to price fluctuations.

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