The notion of elasticity is essential whenever the multi-plicative product of two variables involves a trade-off. (Thus, we have already

appealed to price elasticity to maximize revenue given the trade-off between price and output.) With this in mind, consider the following examples and respond accordingly.

What is elasticity

a.) Court and legal reforms (to speed the process of litigation and lower its cost) will encourage more disputants to use the court system. Under what circumstances could this cause an increase in total litigation spending?

b.)Predict the impact on smoking behavior (and the incidence of lung disease) as more and more producers market low-tar and low-nicotine cigarettes.