Explain the factors that affect consumer responsiveness to price changes for this product, using the concept of price elasticity of demand as your guide.The purpose of this milestone is for students to begin their firm analysis from a microeconomic perspective, applying concepts learned in Modules One, Two, andThree. Specifically, students will examine the supply and demand conditions for the goods or services the firm produces, paying special attention to how salesand product development have evolved over time. Students will then apply the elasticity concept to determine how the price elasticity of demand for the firm’sgoods or services would be categorized, and they will examine what that suggests for the firm’s ability to increase or decrease prices.Prompt: Submit a draft of the supply and demand conditions (Section II) and price elasticity of demand (Section III) of your research paper, including all criticalelements listed below. You will analyze data on firm sales and in the market overall to identify trends and inform your recommendation for the firm’s futureactions. You will also use available data to determine the price elasticity for the goods or services your firm produces and explain the factors that influenceconsumers’ reactions and the firm’s pricing decisions.Specifically the following critical elements must be addressed:II. Explore the supply and demand conditions for your firm’s product.a) Evaluate trends in demand over time and explain their impact on the industry and the firm. You should consider including annual sales figures forthe product your firm sells.b) Analyze information and data related to the demand and supply for your firm’s product(s) to support your recommendation for the firm’sactions. Remember to include a graphical representation of the data and information used in your analysis.III. Examine the price elasticity of demand for the product(s) your firm sells.a) Analyze the available data and information, such as pricing and the availability of substitutes, and justify how you determine the price elasticityof demand for your firm’s product.b) Explain the factors that affect consumer responsiveness to price changes for this product, using the concept of price elasticity of demand as yourguide.c) Assess how the price elasticity of demand impacts the firm’s pricing decisions and revenue growth.CATEGORIESQUESTIONS