If the price elasticity of demand is less than one, then the demand for the goods is said to be ______.

The correct answer is Inelastic.

Key Points

• Demand - 
  • ​Demand means quantity demanded by customers at different prices during a given time period.
• Inelastic Demand:
  • When due to change in price (whether increase or decrease), quantity demanded remains same, it is known as inelastic Demand.
  • In case of inelastic Demand, when the price is increased, it will cause the total expenditure of the consumer to increase because total expenditure = quantity demanded × price.
  • The demand will not change but the change in price cause consumer's total expenditure to increase.​

Additional Information

• Perfectly inelastic
  • A perfectly inelastic demand has an elasticity of 0.
  • A perfectly inelastic demand is one when there is no change in the demand for a product with a change in its price.
  • For a perfectly inelastic demand, the demand curve is represented as a straight vertical line.
• Perfectly elastic
  • When a small change in the price of a product causes a major change in its demand, it is said to be perfectly elastic demand.
  • In perfectly elastic demand, a small rise in price results in a fall in demand to zero, while a small fall in price causes an increase in demand to infinity.
  • In such a case, the demand is perfectly elastic or e = ∞.

• Unitary elastic
  • The demand curve for unitary elastic demand is a rectangular hyperbola.
  • When the proportionate change in demand produces the same change in the price of the product the demand is referred to as unitary elastic demand.
  • The elasticity of a unitary elastic demand is 1.