competitors; in the intervening years, the field has grown to ten major competitors and nearly 200 smaller ones. Is

that likely to have a greater impact than the price changes? We will explore the answers to those questions in this

chapter, which focuses on the change in quantity with respect to a change in price, a concept economists call

elasticity.

Anyone who has studied economics knows the law of demand: a higher price will lead to a lower quantity

demanded. What you may not know is how much lower the quantity demanded will be. Similarly, the law of

supply states that a higher price will lead to a higher quantity supplied. The question is: How much higher?

This chapter will explain how to answer these questions and why they are critically important in the real world.

To find answers to these questions, we need to understand the concept of elasticity. Elasticity is an economics
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