What does it mean if demand is elastic or inelastic?

• A. Demand is elastic when firms can quickly change the quantity supplied; inelastic when firms cannot change quantity supplied quickly.
• B. Demand is elastic when quantity demanded changes a lot in response to income changes; inelastic when quantity demanded changes little in response to income changes.
• C. Demand is elastic when quantity demanded changes a lot in response to price changes (price elasticity > 1); inelastic when quantity demanded changes little in response to price changes (price elasticity < 1).
• D. Demand is elastic when total revenue rises as price rises; inelastic when total revenue falls as price rises.

Answer: (C)