In economics, the concept of demand elasticity measures how the quantity demanded of a good or service changes in response to a change in its price.
Demand is considered to be inelastic if the absolute value is equal to or less than 1. This means that a change in price will lead to a proportionately smaller change in quantity demanded. In other words, when demand is inelastic, consumers are not very responsive to price changes.
Therefore, the correct option is:
- Equal to 1
This indicates that demand is inelastic when the absolute value of the elasticity coefficient is exactly 1.
