Explain the differences between elasticity of demand and elasticity of supply answering the following equations:
1. If the elasticity of demand in its absolute value is close to 2.5, is this market elastic or inelastic?
2. Is this market elastic or inelastic for suppliers if the elasticity of supply in its absolute value closes to .95?
3. How elastic is the market from your point of view ( elastic vs. inelastic) if the value of elasticity is close to -1.25, do we speak about the supply or demand.
4. Discuss how the value of total revenue is related to the value of elasticity? Why and how can we use the total revenue test for elasticity? How elasticity value can be applied by authority of the city/state in order to make correct decision in regards to taxation policy for consumer items?