The general model of demand and supply can be highly useful in understanding directional changes in prices and quantities that result from shifts in one or the other curve. At a deeper quantitative level, though, we often need to measure just how sensitive quantity demanded or supplied is to changes in the independent variables that affect them. Here is where the concept of elasticity of demand and supply plays a crucial role in microeconomics. We will examine several elasticities of demand, but the crucial element is that fundamentally all elasticities are calculated the same way: they are ratios of percentage changes. Let us begin with the sensitivity of quantity demanded to changes in the own-price.