Examples
Price elasticity of demand
Both percentage changes worked out, then what the result means, said plainly: unit elastic.
- 1:18
- Economics problems
- Narrated by Erinome
- English
Made from a prompt
The price of a good rises from ₹10 to ₹12 and the quantity demanded falls from 100 to 80 units. Find the price elasticity of demand and say whether demand is elastic or inelastic.
Video transcript
In this video, we calculate price elasticity of demand using initial values.
Question one. The price of a good rises from ten rupees to twelve rupees and the quantity demanded falls from one hundred to eighty units. Find the price elasticity of demand and say whether demand is elastic or inelastic.
Use the initial values as the bases for the percentage changes. Price elasticity of demand equals the percentage change in quantity demanded divided by the percentage change in price.
The percentage change in quantity demanded is eighty minus one hundred, divided by one hundred, times one hundred, giving negative twenty percent.
The percentage change in price is twelve minus ten, divided by ten, times one hundred, giving twenty percent.
Dividing negative twenty percent by twenty percent gives an elasticity of negative one.
The magnitude is one, so demand is unit elastic, neither elastic nor inelastic.
Notice that quantity demanded and price change by equal percentages in opposite directions. Hence, using initial values, price elasticity of demand is negative one, and demand is unit elastic.
More examples
-
How a neural network learns A network learning to spot cats: a guess, the error it gets back and a small correction, repeated, without a single equation. 1:25 · English -
Why the Moon seems to change shape Written from a NASA Space Place article: the half of the Moon the Sun always lights, and all eight phases in order. 0:59 · English -
كيف تجد قيمة س؟ A multiple-choice question written and narrated in Arabic: the equation is solved right to left in Arabic-Indic digits, every choice stays on the board, and the right one is circled in green. 1:07 · Arabic
Your topic, drawn in about a minute.
Your first 2 videos are free, up to 1 minute each, watermarked. No card required. Full product, every voice and style included.