1. Please discuss the general principlesofelasticity
2. Please discuss specifically the fiveclassifications of elasticity of demand as described on page 94 of your book and give example of products in your life that would fit in each of the classifications. To help you here is an example of something in my life. Since I am a diabetic, my medicine would be considered perfectly inelastic, because regardless of the price I must have it.
3. Please define and discuss price elasticity of supply and how it impacts the decisions of suppliers versus consumers.

PART II HOW MARKETS WORK 94 The price elasticity of demand determines whether the demand curve is steep or flat Note that all percentage changes are calculated using the midpoint method. 5- FIGURE 1 W The Price Elasticity of Demand (b) Inelastic Demand: Elasticity Is Less Than 1 Price (a) Perfectly Inelastic Demand: Elasticity Equals 0 Price Demand ... ... 4. ....... ar Demand 1 . A 22% increase 1. An in price . . . increase in price ... 0 90 + 100 Quantity 100 Quantity 0 2. .. . leads to an 11% decrease in quantity demanded. 2. . . . leaves the quantity demanded unchanged. (c) Unit Elastic Demand: Elasticity Equals 1 Price 65 . . ............' . . .... 1. A 22% Demand increase in price . . . 0 80- 100 Quantity 2. . . . leads to a 22% decrease in quantity demanded. Price (d) Elastic Demand: Elasticity Is Greater Than 1 (e) Perfectly Elastic Demand: Elasticity Equals Infinity Price 1. At any price above $4, quantity 1. A 22% Demand demanded is zero. increase $4 in price Demand 2. At exactly $4, 0 consumers will 50 100 buy any quantity. Quantity 2. . . . leads to a 67% decrease in quantity demanded. 3. At a price below $4, Quantity quantity demanded is infinite