Elasticity and Pricing

Review Questions

If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?

If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?

If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?

If supply is inelastic, will shifts in demand have a larger effect on equilibrium price or on quantity?

Would you usually expect elasticity of demand or supply to be higher in the short run or in the long run? Why?

Under which circumstances does the tax burden fall entirely on consumers?