This document discusses elasticity and its application in business economics. It defines elasticity as a measure of how buyers and sellers respond to changes in market conditions. It then focuses on price elasticity of demand, explaining it as the percentage change in quantity demanded given a percentage change in price. The document provides examples of how to compute price elasticity of demand using percentage change formulas. It also discusses determinants of price elasticity and how elasticity relates to total revenue. Finally, it briefly introduces income elasticity of demand and cross price elasticity of demand.