When the price of a product increases and the quantity demanded decreases, this indicates that the demand is ______________.

When the price of a product goes up and people buy less of it, this shows that the demand is elastic. Elastic demand means that consumers are sensitive to price changes; if the price rises, they will look for alternatives or stop buying it altogether. For example, if the price of a popular brand of cereal increases, some people might switch to a cheaper brand or choose a different breakfast option. This behavior shows that the demand for that cereal is elastic because small changes in price lead to bigger changes in how much people want to buy. Understanding this concept helps businesses make smart pricing decisions to maximize sales.