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difference between elastic and inelastic demand

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1.
a.Can you please define opportunity cost? With the aid of a carefully labelled production possibility curve, could you illustrate the concept of increasing oportunity cost. Why does opportunity cost increase?

b.
i.What is the difference between elastic and inelastic demand. Please be precise.

ii.If a restaurant increases its price of coffee from $ 1.00 to $ 1.20 and quantity demanded falls from 100 cups to 80 cups. How can I compute the price elasticity of demand?

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Solution Summary

Can you please define opportunity cost? With the aid of a carefully labelled production possibility curve, could you illustrate the concept of increasing oportunity cost. Why does opportunity cost increase?

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see attachment

UPDATE:
as in part (c) I used

(Q2-Q1) / Q1
==========
(P2-P1) / P1

where the dashed line === means divided by. Also, take the absolute value of this ...

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