In a perfectly competitive dairy market, if the price of milk increases, how is the equilibrium quantity affected if the demand for milk is elastic?

In a perfectly competitive dairy market, when the price of milk increases, the equilibrium quantity of milk sold will also change, especially if the demand for milk is elastic. Elastic demand means that consumers are sensitive to price changes; therefore, a rise in price will lead to a proportionally larger decrease in the quantity demanded. For example, if the price of milk goes up by 10%, and demand is elastic, consumers might buy 15% less milk because they can easily find alternatives or reduce their consumption. As a result, producers will not be able to sell as much milk at the higher price, leading to a new equilibrium quantity that is lower than before the price increase. Thus, even with a higher price, the total amount of milk sold in the market may decrease due to the elastic nature of demand.