A good's demand is considered elastic if a decrease in its price leads to a proportionally smaller increase in the quantity demanded.

Demand for a good is elastic when a small change in its price causes a large change in the amount people want to buy. This means that if the price goes down, people will buy significantly more of that good. For example, if a movie ticket's price drops from $10 to $5, and as a result, the number of tickets sold increases from 100 to 300, we see that the demand is elastic because the quantity demanded increased more than the price decreased. In simpler terms, when people are very responsive to price changes, we say the demand is elastic. This concept helps businesses decide how to set prices to maximize their sales.