Discuss the differences between elasticity of supply and elasticity of demand answering the following equations:
A) If the elasticity of demand in its absolute value is close to 2.5, is this market elastic or inelastic?
B) If the elasticity of supply in its absolute value close to .95. Is this market elastic or inelastic for suppliers?
C) If the value of elasticity is close to -1.25, do we speak about the supply or demand and how elastic is the market from your point of view (elastic vs inelastic)?
D) How the value of total revenue is related to the value of elasticity? Why and how can we use the total revenue test for elasticity? How elasticity value can be applied by authority of the city/state in order to make correct decision in regards to taxation policy for consumer items?