Read Chapter 4 to answer the questions below. Identify the determinants of the price elasticity of demand. Explain each one.

Determine whether each of the following items is elastic or inelastic: bottled water, gourmet coffee, Apple cell phones, and gasoline. Explain your reasoning. Distinguish between a necessity and a luxury.

How are the price elasticity of demand and total revenue related? Why is the price elasticity of demand important to pricing?