Write a short analytical report (3 – 4 pages) on two topics: shortages / scarcity and point elasticity / arc elasticity and specifically address the following points:
- Explain the difference between shortages and scarcity. In answering this question, you should consider the difference between the short run and the long run in economic analysis.
- Explain the difference between point elasticity and arc elasticity. What problem can arise in the calculation of the latter, and how is it usually dealt with? (Please use actual business examples).
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