1. Elasticity measures the responsiveness of one variable, such as demand or supply, to changes in another variable, such as price or income. 2. There are four main types of elasticity: price elasticity of demand, price elasticity of supply, income elasticity of demand, and cross elasticity. 3. Price elasticity of demand measures how much demand changes in response to changes in price. If demand changes more than price, it is elastic; if less than price, it is inelastic.