The maker of wheat crackers found that increasing the price from $4.00 to $4.25 per box had no impact demand, but increasing the price further to $4.50 reduced total demand. thus, the demand for the wheat crackers is
The demand for the wheat crackers is elastic. This is because a small increase in the price does not affect the demand but only until the price is further increased does the demand change. This is the definition of an elastic demand. The opposite is inelastic demand and this occurs when a small change in the price results to an immediate or big change in the demand.
