Office Hours: Elasticity of Demand

When should you want demand to be elastic vs. inelastic? Learn how to apply elasticity of demand to real-world scenarios.

00:00 Introduction
00:14 Increase in Supply Example
02:17 Decrease in Supply Example
03:30 Summary

[ssandok]

I wish they would have said "clearly Quantity Demanded will increase" rather than "Clearly Demand will Increase" at the 1:10 mark.   Demand isn't changing as you noted earlier.   This would be a great video for my students, but that will reinforce the confusion between demand and quantity demanded.

[shrutiprajapati]

Great work guys ...videos are short and interesting and easy to understand..keep it up

[josephchampion]

The key word in this video for those that are confused is the word hope. In the second scenario, if the supply of apartments dropped and you were a student, then you would hope that the demand for the apartments would also drop a lot. That the demand for the apartments would be elastic. This would mean that the demand would head towards the left on the graph because you would want less competition for the remaining apartments (less demand). I.E. that your fellow students would say f this college thing I'm out of here. This would increase the supply of apartments allowing the price to stay somewhat where it was before the the condemnation of the buildings. I hope this helps people who were confused like I was when it came to the second scenario.

[analyticallysound]

I don't really understand why you would want the price to be inelastic. what if the default price is very high and it being inelastic will mean that the price will always be in the expensive range. on the other hand if it's elastic, the price can get lower and the prices are generally more variable.

[mecheatgood]

Why is the thumb nail of this video roaches? lol.

No one wants to watch roaches. People do want to watch thin, half-naked, probably caucasian women. A woman in the thumb nail would have most likely brought in more viewers than the roaches would have.