Calculating the Elasticity of Demand

[@MarginalRevolutionUniversity]

Continue learning with practice questions: mru.io/cx5

[@JakeRandolphMarketing]

This is so much better than my professor reading off slides that I am paying thousands of dollars for....

[@schanemassey3861]

SO TRUE!!!! (Bartender this man's drinks are on me!)

[@harshvithlani9399]

Jake Randolph So true!

[@preciousandarahvlogs5785]

Hahahahaha same bro

[@jackjo2739]

Sadly you are correct....

[@meznar7417]

100% true

[@signorkd9840]

The curve of corn is inelastic and in case of inelastic demand curve the revenue rises with the increase in price. In the given year, there will be a shortage of supply which will increase the price and shift the supply curve up and left. So, as the price is increased the revenue of farmers will increase.

[@selvinmacwan2689]

when yield in going down the supply will be less and the price will go up. thus when the price goes up and the demand goes down by just a little we get more revenues and a inelastic curve. Also the reason why the demand will go down just by a little is because the substitute of corn that is soybeans is also not more in supply.

[@tadej3080]

I'm also guessing because corn is a broadly defined good, which is used in many different ways, the price elasticity of demand will be lower enough just as it is.

[@vaxman3839]

Thanks you

[@sefterovseymur8792]

true

[@nikhilshah8883]

thanks man

[@nadima.george9499]

I'm 15 and I'm learning so much from this. I wanna become an economist.

[@rudolphdandelion6840]

Good for you kid. Be sure to get good at math. You’ll need math when you go further down the realm of economics.

[@lastyhopper2792]

not to just be good at math, but actually understand how it works

[@danielmccaffrey8493]

I study it at University. Don’t

[@danielmccaffrey8493]

@@rudolphdandelion6840 Honestly underestimated how much maths would be in economics, would seriously reccomend taking A level maths because I’ve got about 2 years of a level to catch up on

[@kw.drillz6111]

It’s hard find something else thank me later 😭

[@thecapitalist1502]

I wish that these guys were my profs back then excellent teaching .. thumbs up.

[@mthokozisinkabinde1959]

Why are you making so much sense?

[@okorogideonikenna2369]

This is the best I've ever come across. Self explanatory , easy and interactive. Very very helpful thanks a million.

[@Copley417]

I'm getting my Masters from a top tier (USNWR top 3 in this area) university. The professors here are fantastic and my microeconomics professor is one of my favorites. They are not as effective as these guys. Your knack for avoiding jargon, the build of the curriculum is excellent with no surprises so far, the avoidance of comprehension-killing abbreviations, and the tie-in to real world scenarios is simply outstanding. I am in my late 50s, a physician scientist and have sat through tens of thousands of lectures. You 2 are among the GOATs. I mean it. Gentlemen, you have created a phenomenal legacy and should be VERY PROUD!. Thank you all. Do you have a biostatistics channel?? LOL

[@larsaugustat7029]

Good to read that I am not the only one doing a master and still coming back to basics:D

[@Mooyaho90]

Very helpful for someone taking a college level online economics class and I have to teach myself everything, now it makes sense. Edit: Idk why I’m getting responses on this comment so many yrs after making it. I don’t even remember the class I took. It was probably in my freshman yr of university. It was helpful at the time that’s it. It was required of my degree to take economics as a business major. And yes you can probs take this in high school in AP or something idk nor do I care. Like yeah in college you have to take stuff you probably could’ve gotten credit for in high school. I got college credit on history and English classes not science or math. Some classes you can’t get AP credit for. Anyways yeah that’s all I have to say.

[@NocturnalToothbrush]

I'm in the exact same boat now. Did you get through the course after?

[@irissidneyyy]

And someone in highschool 😩😭

[@radhikasehgal172]

Nocturnal Toothbrush ha

[@Venkat-sy2fu]

wait wtf how is this college level im doing it in ninth grade

[@john-olivierlukama1548]

Wait college level!?!?

[@tutor2u-official]

We have some great free study resource collections for A level Economics and IB Economics - click here www.tutor2u.net/economics/collections

[@kc3669]

Welp. I wasted 1 hour of reading and still banging my head against a wall, when I could have just watched 15 minutes and understand it.

[@ijeomaifeanacho5655]

Same here

[@sm25265]

Although I know the answer to the crop question (and it’s in one of my books as well) please! don’t ever pose a question and not provide a detailed answer! I make it a principle to discard sources (especially books) that do that! I find it a disgusting behaviour and I’m sure I am not the only student feeling this way.

[@robfraser2820]

The definition of percent change is incorrect. That error ripples through the whole calculation for elasticity. % change = (Q2 - Q1) / Q1. For example, if Q1= 100, and Q1=150, clearly this is a 50% increase from Q1 to Q2. My formula also gets this result: (150-100)/100 = 50/100 = .5 = 50%. His formula, (Q2-Q1)/((Q2+Q1)/2), yields (150-100)/((150+100)/2)=50/125=.4=40%, which is clearly wrong.

[@hosseinfaridnasr2778]

Yes, finally someone else has noticed. I solved one of the examples and my answer was different from the one given in the video and I doubted my definition of percent change.

[@ramonowens8957]

I’m not in the class that means I’ll never get the answer 😭

[@madawamadushan7754]

When the yield is going down the unit price should increased. So farmers can earn more profit because corn & soybean have inelastic type demand curve. Am I correct sir?

[@khanfarhan3047]

Yes I think the same can u please confirm professor 😊

[@huizylove]

No

[@brindleyadolphus4905]

@@khanfarhan3047 Watch the video again to get it confirmed

[@noahfrench7267]

I have learned more in 15 minutes then the 3 hour lecture for micro economics. thank you

[@Gurci28]

"I am just a businessman, giving the people what they want." 9:06 Al Capone

[@leonardoeueueu]

Such clarifying class. Congrats for this great job!

[@shawnpwalsh]

Wow, 6 hours trying to figure this out from the materials my University provided. Now I have it down in 30 min. (only because I stopped to take notes and apply this to the problems I've been trying to solve!)

[@ijeomaifeanacho5655]

For the first time, i understand how to calculate elasticity perfectly. Thank you. This is way better than my professor's explanations. I've subscribed to your channel.

[@elvismbewe9608]

Nothing shot of Laudatory Lecture Wow😲.... Excellent 🤞🏾😁

[@norwegianstud]

How do I do this on a calculator?

[@nnpatricia]

ive commented before but really your videos have helped me so much. much better than textbook honestly saying. thank you for your great work :)

[@moonwalker9462]

You are a life saver. Thank you so much.

[@KenWorkProduction]

So there is a drought yet farmer can maximize revenue by raising the price so it has to be an inelastic demand curve?

[@TheCandyPixel]

KenWorkProduction I believe the same thing

[@GrimFaceHunter]

In US yes, due to use of corn syrup and methanol in gasoline.

[@manny6669]

Another good example is gasoline, because there's hardly a substitute for it

[@khadijasaqib1939]

So is so easy and interactive to understand! Could you still help me out on this one? Product falls to 6$ to 8$ causing demand to extend from 1250 to 12500.

[@MusicalInquisit]

Since the yield must have decreased, the amount supplied must have decreased in the market. Therefore, the supply curve shifted to the left. As a result, the equilibrium quantity is of a lower amount than the previous quantity demanded. If the demand curve remained the same, then it would be fair to say that the price has increased as a result of the shift in supply. However, if the total revenue increases for farmers because of the increase in price, it would be safe to say that the demand curve was inelastic, at least in the short-term.

[@destroyer7712]

"or on a midterm" .o/

[@Akumaragon]

Aha, I'm stuck here now lol

[@radhikasehgal172]

Most useful video

[@habibullahyadgari5386]

I am a student of BBA in Afghanistan I really enjoy studying withyou all thanks a lot

[@sasiganeshkumar84]

Thank you, very useful

[@aaliyahbraynen7529]

This was an amazing video. Keep up the good work and make more.

[@KurtVillanuevaYTB]

Thank you from someone from 9th grade and is currently working on my homework related to this lesson. Oh wait I'm done thanks to you, it's fast and easy

[@trevormyers811]

"I can never remember myself so I always draw these little graphs". Somehow I doubt that but this guy is a legend. Made it so easy to understand.

[@huynhthanhduy8556]

I have the same problem with questions 3,4. Please! someone help me!

[@MarginalRevolutionUniversity]

These questions are tricky! My advice is to graph it and use perfectly elastic (horizontal) and perfectly inelastic (vertical) demand curves when you do. For question #3, if the housing supply curve shifts out (because housing is increasing), then the price of housing will stay the same if demand is perfectly elastic and the price will actually drop if demand is perfectly inelastic. Therefore, if you’re trying to pay the lowest price possible, you’d want demand to be inelastic because the price drops with an increase in the supply of housing, or any good. If you just want intuition, think about it this way- if demand is perfectly inelastic, it means that demand isn’t responsive to a change in price. Now apply this logic to question #4. In this question, the supply of housing is decreasing (shifting in). As in question #3, if the demand for housing is elastic, the price will stay the same. If demand for housing is inelastic, the price of housing will increase because this time, unlike question #3, the supply of housing has decreased. If you’re again trying to pay as little as possible, you should hope that demand for housing is elastic. Hope this helps! -Mary Clare

[@mentalhealthadvocate475]

totally saved me from carrying a module

[@AA-ic7cv]

hi, i have a question. if the price elasticity of demand is -1.4 which is negative. is it considered to be inelastic because its less than one, or is it elastic because we don't consider the negative and we only take the number so its going to be greater than one. thank you

[@TheSagesSon]

Please I'm confused, when he got -10 95 10 15 How did he calculate it, this is where I am stuck.

[@joaovictorbarbosa9785]

Hello Victor, and yes, that part is a bit confusing. However, it all comes to this method he introduced called the *midpoint method* Instead of just dividing the change in the quantity demanded by the change in price, he does the following: Main Equation: (Demand2 - Demand1) / (Demand2 + Demand1)/2 Where: (Demand2 - Demand1) = -10 and the bottom part of the main equation: (Demand2 + Demand1)/2 represents (90 + 100)/2 = 95. You can see that by adding demand 2 and demand 1 and dividing that number by two he is finding the midpoint of that change. Just that! Then you have -10/95 = -0.105 The same applies to the bottom part of the fraction.

[@TheSagesSon]

@@joaovictorbarbosa9785 thank you so much, I'm really bad at math so I'm just looking to pass this economics exam we'll be having soon

[@-omalley5328]

Oh my God thank you so much you have saved me. I've been struggling in my college Economics class and was desperately needing a breakdown of how to calculate elasticity in each of these situations. Thank you, thank you, thank you

[@vummynalwinga9268]

Thank you so much this was so straight forward

[@gurqhan]

Slope of the demand curve gives clue of the elasticity type. Curve ( or slope ) formula is rise= P / run = Q. A steep one will be inelastic as price (p) rise more than demand (Q) decrease. (or vica versa)

[@MasterYoda420]

Bro really explained drug dealing in economics terms ( Someone give this guy a background check)

[@InspirationalFlowerPot-uf2tj]

Kindly reconsider the calculation. I strongly believe there's a miscalculation.

[@dannytran1587]

7:21 This is misleading, as a number could be less than 1 but still elastic. If the number is BETWEEN 0 and 1, it’s in elastic.

[@jentacularkid559]

Wow this was incredibly helpful! Thank you!

[@Kerii03]

Q= 200P-½... Price Elasticity of demand?!

[@hotjut8069]

how to solve with double P like Q=250-P-0.05P2 where P=10

[@manjaribalu8293]

Substitute the value of of p and find the derivative of Q with respect to P2. You will get 0.05.

[@GetRight249]

Can someone please explain the answers to practice questions 3 and 4? Thank you

[@user-io2rd8xi7x]

it took me 5 years to say that I dunno sorry :(

[@mangaldas4021]

Nice video. Very helpful

[@khanfarhan3047]

Very very helpful my ma'am cannot teach like this in her whole lifetime

[@nininbiloy16]

I have my midterm exam next, but still don't how to calculate elasticity

[@MuslimaJuraeva]

Thank you so much, it was very helpful

[@leonkituyi3935]

This is like calculating GDP and I wanna be an economist

[@angelicaplatnauer8793]

Very helpful for going back to the basics on how to calculate elasticity. Especially for midterms!

[@omarmacintyre]

very helpful

[@mm3111_3]

Thank you so much for the lecture! But one question: why when you explained the Midpoint Formula you divided the average by 2? From where did that 2 came from?

[@SmallEditsbyTiwa]

Hi Milena, the two is because he is finding the average between 2 numbers, if he was finding the average between 3 numbers it'll be 3 an so on. I hope this is clear?

[@halimaakter6370]

Can you suggest me how can I well in Microeconomics?

[@mariavassalou5049]

You make it look really simple. Great work! Thank you!

[@barrysevero7566]

I am a seller and at $20 the revenue is $1,000 but at £$10 the revenue is $2,500 in the example the price movement is increasing but that is not always the case. as price offered and demanded can decrease. From a seller's perspective. he is going to increase revenue if he agrees to a buyer's offer of buying at $10 because his revenue increases by $1,000 ( $2,500-$1000) please comment.

[@ntombizanelebless4060]

Thank you very much this really helped me.

[@Nelago-b8m]

Finally I`m saved. Thanks a lot sir

[@abdalakamanda3509]

I love your courage

[@kwkwcan]

I dont figure out the secret of the last question(corn), can anyone answer me?

[@tomasmorales814]

It's curve was inelastic. Since there was less corn, prices went up, but as prices went up so did total revenue.

[@sirdondaniel]

10:55 - this is wrong. At a price of 230, the quantity is 11 and the revenue will be 2530, which is bigger than the revenue for the price 10. So it is wrong to say that "When the price goes down, revenue goes up". The maximum revenue is always at the price in the middle between 0 and price max, where quantity is 0.

[@gamerxpg7014]

I am in grade 9 and I have to study university-level shit

[@uscomba2x818]

Wrong. Percent change in quantity is (Q2-Q1)/Q1 and percent change in price is similar (P2-P1)/P1

[@jackieann1731]

I've been really stuck while learning economics but this really helped me!!

[@MarginalRevolutionUniversity]

Great to hear! Best of luck. -Roman

[@barakakatsara1730]

can someone help me with online courses relating to acturial science

[@aliarehman9746]

why did we use arc elasticity why not point elasticity

[@meckell886]

Funny how I learn far less from the college education my family and I pull our guts out to pay for than just sitting here watching a free resource... Interesting world to live in, huh?

[@nikhilshah8883]

Can anyone explain the last slide "the secret"

[@brindleyadolphus4905]

He said we can move along elasticity of supply quicker as we know the basics but the supply video is just one minute less than this vid. Hmm economics this is.

[@monicashanelucero3305]

What type of elasticity and the formula for?? Price increase,decreAse demand and supply increase

[@justanobody482]

I have a question. Are the figures and the graphs always relative to the buyers’/market’s behaviors? Like can we actually predict the demand of quantity when we change a price through figures?

[@HeydoubleAA]

Great video! Easy to follow and well produced.

[@Orthovisual]

everybody will run to buy now corn so Q of demand increases very much.The price decreases a little bit so TR will explode because the elasticity of demand is very elastic.

[@kessiamathew7500]

a decline in the price of goods x by rupee 4l5 cause an increase in its demand by 20 units to 50 units the new price is rupee 15 calculate elasticity of demand?

[@therock7926]

can price elasticity of demand cross elasticity of demand and income elasticity of demand can be calculated with same formula Q℅/P℅

[@brindleyadolphus4905]

Im not gonna click "Office hours : Elasticity of demand" video. That Thumbnail erghhhhhhhhhhh

[@knowledgedaily6091]

Its greatest video sir Where r u frm ?

[@shafiqmoses3963]

Thnx fr the knowledge

[@ruthranbalu]

Thank you sir very useful sir

[@vansh9857]

Useless profs and university providing asynchronous class for economics my god

[@ShinMaki4]

watched the vid for a few mins and pased an exam Hahaha

[@michaelnyiko2181]

very helpful and thank youy

[@carinkoh4836]

Waoo it's so clear, thanks proffesor 😀

[@TheSagesSon]

Another question did he round his answer to 158 cus i get .157 on my calculator

[@deadalnix]

Why the fuck didn't you siplyfy the equation ? delta(Q)avg(P) / delta(P)avg(Q) Isn't it simpler ?

[@turalismayilov8656]

I am sorry but some people don't know the meaning of "delta", so i think that's why they used it like "change in" term.

[@mikdale2505]

9th grade exam on economics wish me luck guys

[@mdashifulhasanmajumdar3992]

this will be a inelastic demand curve because when demand is high but the supply is low the price goes up which makes it an inelastic demand curve

[@ayushroy0885]

This is really better , Love from India 🥰

[@ibrahimbaig2224]

Love from India❤️❤️❤️

[@vishwaindrawasa8999]

Wow I surprised ❤ this lesson series is better than our prof lectures readings ❤

[@florencenate8937]

Thank you so much for sharing your knowledge. One suggestion, the words/ sentences appearing on the screen blocks me from seeing your written explanations. Anyway thank you again, you're very helpful.

[@ghostofday5025]

maybe turn off the captions?

[@carlosdelacruz6766]

Why you have to divide by 2? Can you just divide it by the original number? Lets say the quantity decreased from 10 to 5 then it is obvious that there was a 50 % decrease but if you use the midpoint formula you will get : ((5-10)/(10+5)/2) = -5/7.5= - 0.66 but if you just divide by the original number , you get : -5/10 = - 0.5 or a 50% decrease. why you must divide it by 2.

[@akshayramsaib4964]

We calculate the average by dividing by 2 😊

[@mppsnco]

Thank you very much! Can you go to Penn State and teach them how to teach this please?!?!?! That said, GO LIONS!

[@abdiazisahmed5874]

Thank you professor

[@mahfoozkhan63]

Thank you very much It was really helpful.

[@marlinochalwe9036]

Please, help me answer this question.. Suppose you decide to produce Sugar and you discover it has a demand function given by Q= 10^-0.5 Y^0.75. That is to say 10 raised to power negative 0.5 multiplied by Y raised to 0.75. a) Calulate the price elasticity of demand. b) Is demand elastic or i elastic? c) Can you conclude that Sugar is an inferiot good? d) Calculate the income elasticity of demand..... Please, help me! Thanks in advane.

[@bongsiewmun3082]

Thank you so much !!!!

[@fijisodaa9787]

thank you so much, i really understand the concepts better now!!