Understanding Elasticity of Demand

Elasticity is a crucial concept in microeconomics that measures how much the quantity demanded of a good responds to changes in price. If the demand for a product is very elastic, a small change in price leads to a large change in the quantity demanded. Conversely, if demand is inelastic, the quantity demanded changes little with a change in price.

Consider the following scenario: A company reduces the price of its product by 10%, and as a result, the quantity demanded increases by 25%. Based on this information, which of the following statements is true regarding the elasticity of demand for this product?