Elasticity Part 1
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Lesson Summary:
This lesson teaches about elasticity, which is a relative rate of change of quantity with respect to price. The video explains how to calculate the elasticity of a commodity at any given price using the demand function. The elasticity function is then used to determine the maximum revenue and corresponding price and quantity of the commodity. This understanding of elasticity is important for businesses to optimize their pricing strategy and revenue.
Lesson Description:
Be able to compute the elasticity of a commodity at any price given the demand function. Use the elasticity function to find the maximum revenue and corresponding price/quantity of the commodity.
Check out www.themathdude.org for more videos.
Additional Resources:
- Notes - Notes on Elasticity
- Elasticity slides - Slides from the video on Elasticity
Questions answered by this video:
- What is elasticity?
- What is the relative rate of change of a quantity with respect to price?
- How do you calculate elasticity for a situation?
- What are the units of elasticity?
- What is the formula for elasticity?
- What happens if E is less than 1, greater than 1, or equal to 1?
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Staff Review
This lesson explains the concept of elasticity being the relative rate of change of a quantity with respect to price. This is just the introductory lesson, and the next two lessons build on this foundation. This is a great place to start, but make sure to watch the next couple of videos.
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