Explain why the demand for the good or service provided by a firm is elastic or inelastic. How does the elastic or inelastic demand influence pricing decisions by the firm to maximize profit? What are the impacts of elastic demand and inelastic demand on total revenue?
Provide examples on how the availability of close substitutes affects price elasticity of demand for a good or service.
Give specific examples of necessities or luxuries, and explain how they affect price elasticity of goods or services.