In economics, the price elasticity of demand is the degree to which a proportional change in the price of a product causes a proportional drop in demand for the product. For instance, if elasticity is 0.5, that means that each 1% increase in price causes an approximately 0.5% decrease in quantity demand.When demand is linear with D(p) = b - ap, the price elasticity of demand, E(p), at price p dollars per item is given by. E(p) = ap/(b - ap) a) We say that demand is inelastic at price p if E(p) is less than 1. We say that demand is elastic at price p if E(p) is greater than 1. Let a = 3, b = 120, when p = 10, we have E(10) = _____ and therefore the demand is inelastic.