The general rule is that at prices below the market equilibrium price, there will be a shortage in the market. Under this approach we cant, however, tell the exact amount of the shortage. Supply curve is upward sloping, demand curve is downward sloping 2. At the equilibrium , quantity demanded is equal to the quantity supplied 3. Decrease in demand or decrease in supply will shift the corresponding curve to the LEFT 5.
Elasticity is a measure of responsiveness .
In this case the loss of revenues due to a lower price is more than offset by a higher quantity sold. Inelastic demand corresponds to the values of elasticity less than 1. If the elasticity is exactly 1, the demand is unitary elactic.