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.
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.
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