This document discusses elasticity and its application. It defines elasticity as a measure of how buyers and sellers respond to changes in market conditions. It then discusses different types of elasticity, including: - Price elasticity of demand, which measures the responsiveness of quantity demanded to a change in price. It provides formulas for calculating price elasticity using percentage changes. - Income elasticity of demand, which measures responsiveness of quantity demanded to a change in income. It also discusses normal and inferior goods. - Cross price elasticity, which measures the responsiveness of the demand for one good to a change in the price of another good.