In this lesson on elasticity, you'll learn how to calculate the elasticity of a commodity based on its demand function and use it to find the maximum revenue and corresponding price and quantity of the commodity. By placing the elasticity formula into the calculator, you can easily recall it to evaluate the elasticity at any price. The optimal price can be found using a table or graphically, and once it's determined, the optimal quantity and revenue can be calculated by evaluating the demand function at that price.
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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