Cross elasticity of demand | Elasticity | Microeconomics | Khan Academy

[@esthernaua]

when this 11min video helps me understand my entire 2hr lecture, MiNdBlOwN!!!

[@jeddslade3540]

you do this in uni?????

[@esthernaua]

@@jeddslade3540 yeh boi

[@FootyRevolutionHQ]

@@esthernaua country?

[@dangiscongrataway2365]

Why do you divide by the average, in class we divide by initial value

[@hashamwasi311]

Ifkr

[@sebbelito2975]

Same here! I am confused by the average...

[@haslan4885]

It's because the %change from 1000 to 1050 is not the same as the %change from 1050 to 1000, but the %change from 1000 to 1025 is the same as the %change from 1050 to 1025 (i.e., ±2,4%). It's called "midpoint" or something like that.

[@cliftonaurelius3060]

@@sebbelito2975 We divide by the average because depending on the price going up or down by the same amount, we will get different percentage of change. For example, a price increase from $2 to $4 will see a 100% change. But a similar price decrease from $4 to $2 will see a 50% change. In order to counter this problem, we divide by the average. So now, by dividing the average, a price increase from $2 to $4 will see a 66% change and the price decrease from $4 to $2 will also see a 66% change. This is because now, you divide by the average for both increase and decrease in price. Hope this helps.

[@bhumikachoudary3763]

Because, Here we are using the MID POINT METHOD. which is a better way to calculate percentage changes and elasticities.

[@khanacademy]

@pengok1995 So that we get the same elasticity whether we move from A to B or B to A. You can think of it as the "average" elasticity between points A and B. You are correct about how you would calculate percentages generally.

[@WestSideRida420]

A1 loses and A2 wins. Keep it up Kahn. You're great. I'm learning more here than in my own university. They actually use your videos in some assignments. Pretty sad that I can come here and learn the same thing in a better way than what my university is teaching. Like I said, they even use your lectures in assignments. What the hell am I paying for? Roughly $18,000 for a piece of paper that says I learned your material.

[@davidepamukcu903]

facts

[@hywsvlorxmp132]

hope youre doing well now

[@innanninna]

your videos are the easiest to understand here on youtube. thank you. you are helping a lot o students with their exams including me

[@graylobo133]

Best treadmill work out videos, i discovered KA over 4 years ago when he only had a few videos

[@Alanyutwhckbsbc]

clear ideas, nice and clear handwriting. I have to say that your videos are really helpful to first-year econ students.

[@santanademelo647]

Incredibly helpful video. Thank You

[@ss9392]

Thanks for explaining! Really grateful❤🙌

[@arathigal]

Hey great videos! I was just wondering if you could do videos on factors that affect elasticity. For PED, PES and CED. Thanks, it'd help a lot (:

[@gabyp2453]

hey khanacademy, quick question so if you had perfect substitutes the CED would be infinity, that is, the CED of substitutes approaches infinity. My question is: "Does the CED of complements approach negative infinity as well?

[@huero0033]

All your videos are really good and clear!!!! Thanks for your time...

[@ysa154]

This channel is better than my prof.

[@filipmtl6]

Thank you!!! i learned more from you than in my school. :D

[@DjSeanTacos]

What courses do Khan Academy not cover?

[@egecav]

does*

[@asdksaopfkpods]

yoo "do" doğru

[@shallusharma6132]

Health economics

[@rtx_____]

Your mom

[@swaggyskye]

accounting, ethics, etc. lol

[@nghialetrung5278]

thank u very much, this video helps me a lot

[@aik1134]

I thought the formula was % Change in Quantity of A Demanded/%Change in Price of B? It looks like he used the Q of B and P of A. I'm confused...

[@ItzIshu-vj8br]

Thanks🙏

[@VijayRaavi]

Good video, but since ebooks are nonrival goods why would people want more of them? I guess they'd want a bigger selection though.

[@tutorialesnet]

Hey, keep the good work up!

[@karo66776]

Perfect explanation❤

[@makemymarket1772]

Hey awesome video man! Thanks!

[@ibrahimb7419]

thank you

[@mohdashraff2150]

Thank you!

[@dushanelettman7809]

great video

[@baddist101]

how do i find XED for the equation Qdx = 10 + 0.06I -2Px -0.5Py + 0.7Pz if Px=9 Py=4 Pz= 10 Income=$250.

[@DD-qe6uk]

I don't know

[@aaronsmarrella3239]

I'm trying to calculate the CED for an example given in class and any help would be much appreciated. We are comparing the complements of Tequila and salt. The original price of tequila is 10 and the quantity is 10. The price went up to 20 and the new demand is 5. The complement being salt had an original price of 2 dollars and the new price stayed at 2 dollars, but the quantity demanded of salt went from 3 to 1. The professor provided a CED of .7 Using your formula, I got -1.5 from the output values of P for tequila being .66 and the output of D for salt being -1 Help please

[@kylepolizotto2539]

You have not given enough information to do a calculation. but if I may interject. Tequila saw a price change of 100%, you would need the % change of quantity in salt to finish the calculation, but lets say salt QD went from 10 to 4. That is about a 60% decline in salt's QD. so -60/100= -0.6. So we know 2 things. 1. the XED value is negative so the goods are complementary. 2. the XED value is less than 1, so they are not that closely related.

[@martinahoto333]

correct me if I'm wrong. the percent change in price for airline 1 should be revisited. i think the percent change is 40% not 4.9%.

[@Pinapoups]

your explanations are so good, it helps me a lot! but i wanna ask, what if the CED values is "undefined"? it is means that the goods are not related too? Thank you

[@gunz543]

great video!!

[@mghz114]

Hello, great video, I would love to know what software are you using as a board to write on?

[@sanatthukral1531]

nicely explained Sal

[@saadkhawar8039]

this is confusing

[@SevenHeaven777]

After 7 years, yeah it is

[@Giovanni-to4xh]

But why do you say that if it is complimentary then it is negative? what if the change in the ereader was positive? then you are not going to have a negative result anyways! It's not always negative! and the substitute is not always positive! right? they can also cut their price and make it not 1050 but 950. then it would be negative? oh im confused sorry

[@95dank]

Magic

[@alexannerberg8545]

How would the equation look like using different customerbases, lets say that some people have a preference for e-books while some dont really like them. So effectively you have something like Q1A, Q2A, Q1B and Q2B.

[@baddist101]

finding XED of Good x and Good y, then XED of Good x and Good z

[@danymathew7325]

love you

[@thecarrots5]

Getting specific, but the penny thing is a bit too insignificant AMAZING VIDS btw, why do i even go to UNI???

[@RihardsDel]

Is it possible to calculate cross elasticity of demand for crude oil and beef?

[@kymanellewellyn8815]

no bc they're not substitutes

[@anza1300]

Rihards yes, but you'll get zero CED because they're not substitutes or compliments.

[@shutingleung8143]

Yes. Crude oil and beef are independent goods, ie. the change in the price of beef will not affect the demand for crude oil. So the XED between the two goods would be zero.

[@atharvadeshmukh2689]

why has 1025 been taken instead of 1050

[@anza1300]

Atharva Deshmukh because (initial value + final value)/2 so (1000+1050)/2= 1025

[@atharvadeshmukh2689]

HowuDoin? Thank you

[@firstnamesecondname8133]

@@atharvadeshmukh2689 that's average If we want to average 2 things we we devide with 2 or if we want to Average 3 things we divide by 3...

[@Duci1989]

Do I understand correctly @5:17 that a price increase of 1% in tickets for Airline 1 would lead to a 13.4% increase in the demand for tickets from Airline 2?

[@aishaabdi1906]

in your average on the airline1 you said 4.9.... what if you used 0.05 as the change in price will it be wrong or is it a must to change the round off decimal? i understood the vedio but thats my question please answer back.... thank you

[@BuffaloShifter]

why do you take the average isn't the percentage formula change over original multiplied by 100?

[@byzantiumn8564]

Why is what im being taught in my economics 1000 course completely different from almost anything you talk about in these videos :/

[@kylepolizotto2539]

That is because this video contains many errors and simplifications that lead to inaccuracy.

[@beardededdie284]

Sal's usually pretty spot on.. Perhaps the class covers another aspect of Economics?

[@kimsohyun121]

where do you get the calculator??

[@DynastyJr]

keep it up

[@bhumikachoudary3763]

According to formula = %change in quantity demand of good 1(A1)/ % change in the price of good 2(A2). But you have taken %change in price in good 1(A1) and %change in quantity of good 2(A2). it's confusing..

[@SkinnyPe]

9:32 why 1050??? 100/ 1050 Q it should be (100/ (1100-1000)} right?

[@couleurs5733]

100/( (1000+1100) /2) = 100/1050

[@busraa838]

there are three title under the cross elasticity of demand: substitude goods, complementary goods, and independent goods. I took two of them from this video but where is the indepentdent goods that last one?

[@syntheticfiber7388]

he gave the example of a basketball and an e-reader

[@khanacademy]

@plamenxyzpenchev Cross Elasticity of Demand

[@adityarane2758]

it is 0.49

[@Smidday1]

I keep getting this mixed up with the Midpoint (Arc) method

[@devil18chauhan]

so, the CED for substitue goods is perfectly elastic, CED for unrelated goods in perfectly inelastic? Someone please confirm this

[@nyarhasannisa8364]

Yes

[@rainl.7342]

He wrote it's 90 but it's 80

[@samiasultana44]

No you have to take the average. 100+80=180 then 180/2=90

[@DD-qe6uk]

Highest possible XED is 753 billion

[@PupunRayna]

question: how is the increase from 200 to 400, which is a 100% increase, become a 67% increase? getting rid of formula and just use logic and common sense

[@spectra7gaming471]

I think my professor or teacher or whatever he was was attempting to over complicate this idea

[@jrmjay9478]

where did you get the1025 from?

[@ice_OnFire]

in between of 1000-1050

[@tsheringlhamo6233]

How do I get that calculator?

[@isaacblevins3622]

This video sucks, why would you not use the unit neutral formula for elasticity

[@jsmmz1820]

You lost me when u divided 50 to 1,025. Im stupid. Where on earth did u get 1,025 from??😭

[@jamiainaga5853]

Completely wrong

[@Paswansonu80]

totally faltu lecture its better to read book he is like reading chapter

[@RajenderKumar-zv2rf]

Sonu Paswan Bilkul sahi 👍👍

[@harikrishnan2713]

Not at all!! Lol

[@kritinthapa29]

what the heck ?you are confusing me?

[@onkarpawar1]

thank you