Price elasticity of demand using the midpoint method | Elasticity | Microeconomics | Khan Academy

[@mujahidsyed2917]

It's crazy. I come to this dude for physics and chem and now i'm here for econ and even art history. Dude is unreal!

[@RankaNikunj]

For those who are asking why our method differs for his. Here's the answer There are two ways of calculating PED( price elasticity of demand) 1) *Arc elasticity* 2) *Point elasticity* This this video, he did using arc elasticity, which uses *averages* in denominator.

[@ilaydagirgin4743]

hey, I hope you answer my question, how do we decide what to use when? I mean when to use Arc e. and when to use Point e.? our tutor uses the point e. formula for example and I feel super confused

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You teach me math since I am in grade 6, then chemistry, biology, physics... Now you are helping me with econ. Five years ago I said I will donate to Khan Academy one day I earn my own money because you helped me so much. Sorry, I finally recalled this promise. Please continue with great work educating students! My life path would be completely different without Khan Academy.

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i don't think you know how much you're videos are saving my life , i wish i could shake your hand ,omg

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donate

[@1chaft]

study tip: play this at 1.5 speed and save time and deal with less pauses

[@beardededdie284]

You're a saint.

[@pushkarkulkarni4861]

Yeah it works

[@autistinquisitor9441]

Thanks.

[@chalkchalker7084]

the guy is like:"so, change in price chaaange in price change in price? chaaange in price change in price

[@dolliekwong8811]

Nice hahahaha

[@nefo706]

you sir have no idea about how much your videos are saving my life. You are the reason why I'm passing in Biology and Economics. keep going you

[@Nolo777]

that little white thing you forgot to erase is killing me

[@alifanwer9518]

+Manuel Jimenez effects of OCD lol

[@aymanalam427]

Manuel Jimenez lol

[@pgdm-bcimr2507]

Just a day before my exams and all economics concepts are going bouncer. Your videos are truly saviour

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This guy pops up everywhere for my classes. Solid narrative voice, and breaks things down incredibly well.

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Will everyone stop complaining! Khan Academy is one of the greatest learning environments on the internet besides Crash Course. If you want to complain about everything, go read one of those thick and dusty textbooks that brought you here in the first place. No? Then shut up.

[@rakeshranjan5812]

economics exam on next Monday......tensed!!!!!!!thnxx to all this coz nothing had been taught in our school...... nothing goes in my mind when the teacher teaches....

[@hannahzubkoff9935]

Youre a life saver, I can NOT understand my professor at all and her examples make me so confused. Went from understanding nothing to everything, thank u

[@etch.asketch2420]

I've been watching this guy's videos for months and I've only just noticed he says everything at least twice. Now it's all I can hear...

[@bhargavrox]

I didn't get the average part. We weren't taught that in school

[@hermionegranger4080]

It's not change in quantity, it's a change in quantity demanded.

[@kingpanda1]

Thanks so much for the help. You've literally saved thousands of kids haha! God bless to all!

[@barrel34]

I was taught this way (Q2-Q1/Q1)/(P2-P1/P1) where Q2-Q1 = Change in Q and P2-P1 = P. In the video he say's that we should divide both of the "changes" by the averages of the sums of what it was and what it is. hope I made sense? can anyone explain why is that?

[@user-pk3bo7tg2b]

Mr. Khan as a Econ major your way of solving the problem could be little confusing and difficult. PED's Formula = (Q1-Q2/Q1) ÷ (P1-P2/P1) will be much easier to use. Ex) price of orange was $10 and it increased upto $15, Quantity demanded was originally 100orange and decreased to 80oranges what will be the PED? 0.1 is PED and its smaller than 1 so it will be (inelastic) hope this easy way of solving will help

[@humnaali5607]

But there is something with the negative sign. That's why he was using absolute elasticity

[@wingbliss]

Thanks, you are the BEST! You make economics so easier to understand! Cheers.

[@erikabarcenas2]

this video really helped me, and was easy to follow ! THANK YOU !!!!!

[@rastadeniz8286]

THANK YOU!!!!

[@sengkathirparri9311]

Thanks Khan Academy

[@sashaslove_1]

SO CONFUSED. This confused me way more than I was.

[@UnitedPebbles]

This is a sweet review for UCO's Business school.

[@laurenbarber8579]

a "unitless number", your word choices are revolutionary thank you

[@sterling32157]

CooperKenison What he's calculating is called the arc elasticity, and he did it correctly. Basically it treats the whole line segment as the original value for the sake of finding the percent change.

[@claireandalice]

Your handwriting is so lovely.

[@tsakanimidaka8309]

Thank you for the videos' you are a life saver, keep up the perfect job

[@ScrappyDew22]

look at him using physics to explain economics... great example for an engineer moving to business!

[@sheirodney9264]

Thank the Lord I finally got it!

[@c0ntender1]

the way the you calculated is different from other teachers and also gives a different answer smh

[@headlessslayer5218]

c0ntender1 yup

[@RankaNikunj]

There are two ways of calculating PED( price elasticity of demand) 1) Arc elasticity 2) Point elasticity This this video, he did using arc elasticity, which uses averages in denominator.

[@kotoriacgll4449]

@@RankaNikunj but when to use the first one and the second one?

[@alveerasmystery357]

@@kotoriacgll4449 it would be given in the ques

[@lavishlacquernails]

Thank you so much for the help!

[@KaddyCeesay-pc1vc]

Thank you

[@Ag12x]

I finally understand it!

[@lucasgraboski1535]

Thank you!

[@thereviewerisback]

I feel like this video should be 20 seconds longer. Anyways thank you for the help!

[@d3ltabrav0]

TI-85! Such nostalgia!

[@tashannon1745]

please explain how the fuck the change from 2 to 4 is a %66 change..?

[@nakhoi1997]

+TAShannon1 yeah, wouldnt it be 100% change? I'm super confused

[@uPB4uTube]

+Nguyen Anh Khoi Once again, I am aware this was posted a month ago... but... Its done differently in economics than in regular math. The change in Q is 2, and so you divide 2 by the AVERAGE of the original Q and the new Q, in this case 2 was the original Q and 4 is the new Q, therefore it is 2 (The change in Q) divided by (The Original Q and new Q) (2+4)/2 = 3 Hence we get 2/3 = 66%. This way if we go backwards and go from Q4 to Q2 we still get a 66% change in Quantity. It removes the issue of percentages when raising/lowering a value. For eg, if someone said to raise the number 10 by 50%, it becomes 15, if someone said reduce the number 15 by 50%, you get 7.5, and so you can see that working backwards using regular maths percentages does not work for price elasticity. However if we use the average of 10 to 15 it will work both ways. This is quite a difficult park to explain however once you understand the concept it will make sense. Good luck!

[@sherrys6460]

very colorful presentation, which helps a lot. nicely done!!!

[@MariaMaria-si4py]

Real Life is Big Different. Many business doesn't have to do a lot of step like this. The thinking is products, price, profit, loss, and plan. Any way we as human have a different way of doing and so ideas.

[@barrel34]

@ScienceHelpWPS thanks mate, I told that to my teacher and he said he's going to think about it. He also told me that both ways are acceptable, but he admitted that this one is better! thanks again :)

[@iannhedfi8902]

thank u a lot

[@ScienceHelpWPS]

@NikaKasradze The find the percentage change in Quantity and PErcentage change in price, you must use: Difference/Average, or (Q2-Q1)/(Q1+Q2/2) Same for price. When you get those two quantities, you divide the Quantity % change by the Price % change to get Elasticity of Demand

[@simranwadhwani631]

U r a genius mann!!!!

[@dchall8]

I wonder how much more visually understandable this would have been if the graph was flipped into the conventional view where the independent variable (price) goes along the X axis and the dependent variable (burgers per hour) is along the Y axis.

[@etho7351]

I feel like there is a better way to represent this equation

[@shaheerkhan6815]

i actually used this "Taking average" method for calculating "% quantity demanded" instead of the "divide by the first value" method...... and my teacher just straight up docked my grade for it...--___--

[@moitrig.9530]

thank you so much for making this so clear 😊

[@kofi862]

keep up the good work Mr. Khan. nice work

[@k189644]

Fast forward to 5min and 30sec to save time

[@95dank]

Old number - new number. divide the outcome by the old number multiply what you get by 100

[@frikhatomar6426]

Thanks a lot

[@arwanouira1558]

That was very helpful, thank you ❤

[@iamtheubermenscher]

i owe you my life.

[@UnitedPebbles]

Elasticity of demand: change of quantity consumption compare to change of price. Repeat this three times and you get yourself a demo tape for audible.com.

[@sonubs520]

please put video based for icse syllabus all subjects

[@SuperaMAYzin]

it's %change in quantity / % change in price, not the other way around.

[@lilcodec46]

May Phyo that’s what he did lol

[@selwynpaul5192]

very helpful

[@ahmetgokkaya8127]

if you remove the subtitle lock, I want to translate to turkish. pleas??

[@mj_genre007]

Hi! Can anyone tell me what's the equation? Thanks!

[@Muso992]

Change in price. Change... Change in price. CHANGE in price. Change in PRICE.

[@tonyyt408]

its nice. but there is one question i am misunderstanding. why should we use the %change in quantity over " the average of price" ? could someone explain it to me . thx much

[@5iveever236]

it's unitless, so the unit's end up cancelling out

[@user-em4vq5cy4x]

so basically the rate of change, i feel like its all just fractions of fractions

[@QuasiBelgium]

Watch out! We got a badass over here! (Quite a few, actually...)

[@sterling32157]

@dontchaworrychild He gives a pretty good answer to your question from 9:00 - 9:40

[@venybzz]

Hey there my friend, thank you so much for your videos. They are really good for beginners to understand basic stuff. I want to ask about the the average formula you are using for elasticity. You explained that your are doing this in order to have the same result for A->B & B->A. But, doesn't matter that result is different number when you use the average formula and the "original" one? Or, is about elastic or inelastic and number doesn't really count. For example, from A->B E=2, so it is >1. Also, do you have any video for income elasticity? Thanks in advance

[@sannevanloon2601]

You have saved my life !!!

[@fredwardNO1]

@xbsl123x I don't think you have made a mistake, that was what I was taught for A-level economics :)

[@AFROTHINKER]

I don't know if any one pointed that about but there is mistake on the graph. Price = x and Quantity = y. the graph has it backwards...... Hence % change in Q/% change in Price.

[@ensuena2]

that would make everything easier but unfortunately the variable is actually on the y axis, price, and quantity demanded is the x. Economics is weird....

[@arjaymadriaga6608]

How about if there are 3 points that you need to calculate (something like point A-C or ABC). How is that? Thank you for responding ☺️.

[@ttran8999]

Hi there just wondering .. what if I’m given the elasticity of supply and demand and there is an increase in production which increases the price to 2%… how do I find the percentage change in quantity? Any help is appreciated. Thank you and your life changing videos.

[@kathrynnjoki6609]

Which is the most elastic demand

[@fahadahmed3983]

i understand easily please

[@BruchoSindicate]

How to find price if i know Demand and Supply? I am thinking for hours and can't figure it out..For Ex: Demand in units - 5400; Price - ???; Supply in units - 590? This is kind of a rocket science.

[@fahadahmed3983]

you added more videos

[@lauraw3129]

When a free class online teaches better than my $10,000 schooling does....

[@KoolKaiser]

almost all the videos i see are too basic, nothing like this will ever be asked on my exams...

[@thisisrtsthree9992]

+KoolKaiser yeah, but don't forget my friend that those videos are not designed to replace in depth books, articles, etc. These videos are great for contrast and context.

[@KoolKaiser]

ThisIsRTSThree999 to me theyre only really useful if u either dont go to class, dont learn in class or u studying online. I mean theyre very well done vids, just way too basic if ur actually in an institution and are serious about ur work

[@thisisrtsthree9992]

KoolKaiser yeah in that case it's better to get a book. Even tho there are books that are even more basic than these videos. Like, Mankiw's book, that book is sooo basic, it only has a handful of mathematics, everything is done with graphs without numbers.

[@KartingApexKing]

+KoolKaiser Why are you complaining. Purchase a text book instead, instead of complaining about a free video.

[@KoolKaiser]

Hamilton 47_ I wasnt complaining i was stating my opinion...furthermore if a textbook was a viable option at the time I would have used that.

[@jacksoutofthebox]

Skip the first 3 minutes.

[@jacksoutofthebox]

*5:00

[@silviogrijalva8801]

Mason Smith nah

[@Aa-xb6of]

Nice

[@pamelamorales3173]

the fact that you literally say everything twice kills me. learn to just be comfortable with pauses PLEASE they wont kill you

[@Elusive0101]

channnge in price...change in price....channge in price

[@BenGenio]

When are these videos going to be uploaded on KhanAcademy? I want to earn Energy Points there, I have already watched the first 16 videos of the MicroEconomics playlist. Please, let us know! :)

[@CooperKenison]

just so everyone knows, %change in this video is calculated incorrectly. it should be (new value - original value)/original value. Just look at the change in quantity from 2 to 4: That is a 100% increase, not a 67% increase like Sal's method suggested.

[@Theslboutiquellc]

So what is the midpoint formula

[@gammaraycube]

between C and D formula i got -1.22% and not -1...which one is correct?..am bit confused..cheers.

[@illicitlegacy3783]

So inverse of slope?

[@Hooghog]

Economics Unit 1 exam tomorrow -.-

[@naikkelas1241]

This one need a whole lot of preparation. F-ing confusing @_@

[@prosofinajerome6899]

what is price inelasticity of demand

[@fatffatable]

i love you!

[@Mongee25]

omg Thank you!

[@baritmarkkennethb.9142]

What is the issue about in this video price elasticity of deman?

[@meeeeeeeeeeeeeeeee733]

I kinda don't get it. How could it possibly get the 8.5 as average??

[@brah8626]

9+8 devided by 2

[@loveonsalem]

@@brah8626why would he divide by 2? Tho? Wouldn’t it be 1

[@brah8626]

oh man i would really love to anwser ur question but i dropped of collage and literlly forgot every thing i took lol@@loveonsalem

[@JamieDigitalArt]

0:06

[@ashwathsumugam7018]

A legend

[@proznar]

WTF are u doin man! You used the formula wrong way! You make me confused dude!

[@MaDkiLLaV2]

+Egemen Özdemir Yeah, he got the average wrong...

[@cosmic_kid2868]

no he didn't. 2+4=6/2=3 9+8=17/2=8.5

[@sachinmathur2320]

he got the % wrong (4-2/2*100=100%) 100% change in quantity .as you can see without mathematically

[@rikoshcet]

agreed

[@cjcunningham3820]

Vlad is that you?

[@95dank]

why is your handwriting so damn nice? i feel like a caveman.

[@foxdfive1]

what kind of software is this to draw out these problems. Looks like a blackboard with no hands

[@iPhone3GSCase]

@ShwangShwing sick guy