Elasticity of Demand- Micro Topic 2.3

Mr. Clifford introduces elasticity, explaining how it measures the sensitivity of quantity demanded to price changes. He discusses inelastic demand using gasoline as an example, highlighting its few substitutes and necessity. Elastic demand is explained with its characteristics of having many substitutes and being a luxury. Unit elasticity is when the percentage change in quantity equals the percentage change in price. Perfectly inelastic and elastic demands are also covered. The total revenue test is introduced to show how price changes affect total revenue based on elasticity.

Describe what happens to quantity demanded when the price of a product with elastic demand increases.

What does it mean if a product has a perfectly inelastic demand curve?

How can understanding elasticity help businesses in pricing strategies?