CEVAP:

We can interpret the price elasticity of demand as follows:

1. When E_p<1, the demand is inelastic (not elastic). We can say that the consumers are unresponsive (insensitive) to the changes in price: a change in price produces a smaller change in demand;

2. When E_p=1, the demand is unit elastic. The change in price results the same amount of change in demand;

3. When E_p>1, the demand is elastic. The consumers, in this case, are very sensitive to changes in price. Even a small change in price will probably result in a substantial change in demand.