1) Give the range of price elasticity coefficients for elastic, unit elastic, and inelastic demand.

2) A product has perfectly inelastic demand.

2a) What is the price elasticity coefficient for the

product? If price goes down by 20%, what will be the impact on total revenue?

3) A product has perfectly elastic demand.

3a) What is the price elasticity coefficient for the

product? If price goes up by 10%, what will be the impact on total revenue?

4) Define necessity and luxury in terms of income elasticity. How would demand for each

respond to an increase or decrease in income?