In the context of elasticity, if the price of a product increases and the quantity demanded decreases significantly, this indicates that the product is __________.

In the context of elasticity, if the price of a product increases and the quantity demanded decreases significantly, this indicates that the product is elastic. Elasticity measures how much the quantity demanded of a product changes when its price changes. When a small increase in price leads to a large drop in the quantity people want to buy, it shows that consumers are sensitive to price changes. For example, if the price of a popular brand of sneakers rises by 20% and people buy 40% fewer pairs, it demonstrates that the sneakers are elastic because shoppers are likely to look for cheaper alternatives. This behavior highlights the importance of pricing strategies for businesses.