In this module, you are required to learn the basic theories of supply and demand. Supply and demand are the forces that make the market function. You will also study the concept of elasticity. Elasticity is the measure of responsiveness of one variable from a change in another variable. In this course, we focus on the price elasticity of demand. It is ratio of the percentage change in quantity demanded to the percentage change in a price of a good. Essentially, it measures how consumers respond to changes in price. Please read the following materials (be sure to read the required sections): Required Material Economic Concepts: Demand, Supply, and Elasticity http://www.pearsoncustom.com/mct-comprehensive /asset.php?isbn=1269879944&id=12226 Interactive Tutorial Economic Concepts: Demand, Supply, and Elasticity http://www.pearsoncustom.com/mct-comprehensive /asset.php?isbn=1269879944&id=12262 Podcast Optional Course Handout Supply and Demand Optional Reading James, S. (2012, February 17). How the rich get richer, rental edition. New York Times. Retrieved from: http://www.nytimes.com/2012/02/17/us/san-francisco-rent-control-and-unintended-consequences.html?_r=0 After reading the materials from the Background page, address the following questions in an essay or short answer form: In some cases, the government can intervene in the market when the equilibrium price is too high or low. For example, a price ceiling is a legal maximum price that can be charged in a particular market. Do some research on your own. Is a price ceiling set above or below the market price? Give an example of a price ceiling and discuss some disadvantages and advantages of this type of government intervention. An art museum raises its admission price, and ends up with a decrease in its total revenue. How could you explain this situation to the museum director? Suppose Billy drinks two cups of coffee a day no matter what the price. What type of elasticity does coffee have? What are the main determinants of elasticity of demand? Which is likely to be more elastic—the demand for orange juice or the demand for a particular brand of orange juice? Assignment Expectations Use concepts from the modular background readings as well as any good quality resources you can find. Be sure to cite all sources within the text and provide a reference list at the end of the paper. Length: 4–5 pages double-spaced and typed. The following items will be assessed in particular: Your ability to understand an application of supply and demand. Some in-text references to the modular background material (APA formatting not required). The essay should address each element of the assignment. Remember to support your answers with solid references including the case readings. Upload your paper to the Case 2 dropbox when it is completed.