Ceteris paribus, assume the police have reduced the amount of heroin in the market with the arrest of major heroin dealers. Use demand and supply graph(s) and the concept of the price elasticity of demand; explain the impact on the price, quantity and total revenue in the market for heroin if the:

1. The demand curve for heroin is elastic (1.5 Marks)
2. The demand curve for heroin is inelastic (1.5 Marks)
3. If you owned a business, explain in detail how you will apply the concept of price elasticity of demand when setting price (1.5 Marks)