What does a price elasticity of demand value of -1.3 indicate about demand?

A price elasticity of demand value of -1.3 indicates that demand is elastic. When the absolute value of the price elasticity of demand is greater than 1, it reflects that the quantity demanded is quite sensitive to changes in price. Specifically, a value of -1.3 means that a 1% increase in price will lead to a 1.3% decrease in the quantity demanded. In this case, consumers are relatively responsive to price changes, and the demand is considered elastic.

In contrast, inelastic demand would be indicated by a price elasticity value between 0 and -1, meaning that price changes do not significantly affect quantity demanded. Unitarily elastic demand occurs when the elasticity is exactly -1, indicating that price changes result in proportional changes in quantity demanded. Perfectly inelastic demand would be represented by a value of 0, meaning that quantity demanded remains unchanged regardless of price changes.