What is price elastic demand?

The textbook definition of price elastic demand is when % change in quantity demanded (QD) is greater than the % change in price (P). This can be viewed in the formula for price elasticity of demand: %change QD/% change P = PED (price elasticity of demand). Demand can be said to be price elastic when PED is greater than minus 1, because the % change in QD is greater than the % change in P - take a simplified example where QD increases by 20%, while P decreases by 10%. 20 divided by -10 is -2. PED is always a negative number because P and QD and inversely correlated- if the price is higher people will always (ceteris parabus- all conditions assumed to be the same) buy fewer!
Price elastic demand is most often attributed to a high availability of similar substitutes. If Toyota put their prices up, people will find it really easy to switch to Honda, Ford or any other mid-range cars. Therefore, the QD demanded for Toyota will decrease by a greater percentage than the price increase.