This document discusses elasticity, which measures how responsive buyers and sellers are to changes in market conditions like price. It defines price elasticity of demand as the percentage change in quantity demanded given a percentage change in price. Demand can be elastic, inelastic, or unit elastic depending on how much quantities change relative to price changes. The document then examines factors that determine a good's elasticity like availability of substitutes, percentage of income spent, and whether it is a necessity or luxury. It also defines income elasticity as the responsiveness of quantity demanded to changes in consumer income.