Chapter 5

Chapter 5 is a continuation and add on to chapter 4's supply and demand mechanics and concepts. It focuses mainly on elasticity, which is how the quantity of supply or the quantity of demand is affected based on the responses of consumers and sellers. It then talks about inelasticity and elasticity. An example of an an inelastic good is salt. If the price is increased, the demand would be largely unchanged as very few people buy it frequently. However, if the price of an elastic good like kit-kat were to increase, many people may switch to another type of chocolate. One question I had is for unit elastic products, how does it not effect total revenue since the price is changing? Total revenue is the amount paid by consumers and the amount received by sellers. Why is supply more elastic in long run than short run? Is it because that responses from buyers and sellers is usually only temporary until the good recovers back to equilibrium? The reason why some goods like water are inelastic is because they are very important and people are willing to pay a lot as its a need for survival. The cross price elasticity of demand shows how much the amount demanded changes based on the change in price of another good. After reading the chapter, although they were through with their general  descriptions, I think there could have been more quick/small examples to explain some of the concepts rather than having huge ones at the end after all of the reading.