Elasticity of Demand

How much does quantity demanded change when price changes? By a lot or by a little? Elasticity can help us understand this question. This video covers determinants of elasticity such as availability of substitutes, time horizon, classification of goods, nature of goods (is it a necessity or a luxury?), and the size of the purchase relative to the consumer’s budget.

00:00 Introduction
00:51 Elastic vs. Inelastic
01:57 Inelastic Graph Example
02:28 Elastic Graph Example
03:18 Elasticity Rule
04:15 Determinants of Elasticity of Demand
05:09 1. Availability of Substitutes
07:31 2. Time Horizon
09:00 3. Classification of the Good (Broad vs. Narrow)
10:11 4. Nature of the Good (Necessity vs. Luxury)
11:12 5. Size of the Purchase, Relative to Your Budget
12:19 Summary

[jaidak]

This man just summarised an entire chapter of my textbook in 14 mins

[mannatkalra]

This channel is highly underrated! The concepts are taught in such a simple and lucid manner. Absolutely brilliant 👏

[potatokaiyote]

I enjoy and understand these lectures more than my microecon class. Thanks for the help.

[BenMousavi]

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love and respect from Iran

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[raion]

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[klonisarcher]

I really like your videos. They have helped me alot. However, changing the price in toothpicks from fifty cents to a dollar is a 100% increase. 50% increase would be seventy-five cents.

[Newchallengerz]

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You deserve 5* rate!

[tragicriots]

wow. interesting and SOOO much better than whatever my microeconomics was trying to explain in a 2 hour lecture. this was clear and to the point. thank you so much!

[yarwonbarto]

Thank you so much! Your explanation and examples make it so easy to understand the concept of Elasticity. I was reading the textbook and it didn't make sense, but watching this video clarifies the concept of elasticity.

[TasbihaAnsari]

This is so goood! I was reading my textbook and had no idea what was going on. Look at your video and I get it; I feel as if I don't need to memorize as I get it. Thank you so much!

[trinitypark]

so good! I'm studying for my mid term. I didn't understand a bit from my professor. So grateful... Thank you.

[raquelcrader]

This video has helped me so much with my project so glad I found this

[lucasmwago]

Very useful teaching methodology for beginners like myself. Hope brief notes will be available for further reading and reference

[raygaytan]

Thank you! My instructor needs to take lessons from you. =)

[martinepstein]

Another great video!

11:53 "Consumers probably won't even notice whether toothpicks are 50 cents or a dollar. That's a 50% increase in price..."
:O

[The_Explainer]

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[facultyofeducation]

thanks for you supports young economists and also i thank for your effort that paid the economics...

[habibakhattab]

Thank you so much for this video! can you write down the answer steps for the practice questions please? Thank you in advance

[childofgod]

$0.50 to $1.00 for the price of toothpicks is a 100% increase in price, not 50%. Just to illustrate that it's an even larger price increase than you stated, and still it isn't considered a big deal.