If the price of a product decreases and its quantity demanded increases significantly, which type of demand does this scenario illustrate?

This scenario illustrates elastic demand. When the price of a product decreases, and a lot more people want to buy it, it shows that people are very responsive to changes in price. In elastic demand, a small change in price leads to a big change in the quantity demanded. For example, if the price of a popular video game drops from $60 to $30, many more gamers might decide to buy it, leading to a significant increase in sales. This behavior helps businesses understand how to set prices to maximize their revenue.