Introduction to price elasticity of demand | APⓇ Microeconomics | Khan Academy

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Economists use the concept of price elasticity of demand to describe how the quantity demanded changes in response to a price change. In this video, explore a simple way to calculate the price elasticity of demand, how to interpret that calculation, and how price elasticity of demand varies along a demand curve.

AP(R) Microeconomics on Khan Academy: Microeconomics is the study of individual decisionmakers in an economy, such as people, households, and firms. Learn how markets work, how incentives drive decisionmaking, and how market structure influences market outcomes. We hit the traditional topics from an AP Microeconomics course, including basic economic concepts, markets, production and costs, profit maximization perfect competition, imperfectly competitive market structures, game theory, factor markets, and income inequality.

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[wess]

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[essentialoilsnx]

Price elasticity of demand is very good to know for business owners.

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[mineheart]

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[britlewis]

Why aren't you using the equation My professor and all other videos use this equation, and when you use it you get a different result.

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[EricPham-grpg]

In the theory of price is the social and environmental cost is what killing us in long run but rarely people had it in condideration or correctly see it

[Roo_Ba_Roo]

Thanks, that’s a great comparative explanation!

[dmdrendall]

Hi, Interesting you're considering a rate as a quantity.

How does adding a time dimension ripple through other aspects including how the demand curve intersects with the supply curve, time value of the product?

Also curious as to whether a demand curve's independent variable really is the quantity, rather than the price, since from the consumer's perspective, the quantity isn't usually the given. Typically a price is given, and then the consumer decides how much they want at that of expressed as Q = f(P). Because we are typically in the position of having to derive a demand curve, using probability distributions of demand-side characteristics (i.e. demand destruction), and those probability distributions usually relate to the independent variable in a function, how should we normalize such relationships?

[elizabeththabile]

I have a test tomorrow
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[vova]

hi from what i understand it is better to find companies with inelastic demand because they have somewhat of pricing power, but what if they run into competition and need to lower prices since their quantity barely affected in relation to price, i wonder if it true to assume the price elasticity can change from inelastic to elastic after this scenerio ?