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Lecture Comments (44)

1 answer

Last reply by: Professor Jibin Park
Sat Oct 15, 2016 3:25 PM

Post by derui wang on October 6 at 08:42:41 PM

When e?1? demand is still elastic??? Isn't it inelastic?

1 answer

Last reply by: Professor Jibin Park
Wed Jun 1, 2016 5:11 PM

Post by Mohsin Alibrahim on May 26 at 10:43:26 AM

Hello Professor Park
Is unit Elastic point where elasticity equal 1 ?

2 answers

Last reply by: Irene Chia
Tue Sep 15, 2015 12:42 AM

Post by Jim Tang on July 19, 2015

prob super picky question, but i believe ur best suited to answer this since you've been grading these ap exams for a long time!

in the lecture, you wrote (4-5)/4 = | -1/4 |, which, in itself, is not a true mathematical statement. though most people will understand how the absolute values factors into elasticity of demand, do graders take off points bc of small mathematical mishaps?

1 answer

Last reply by: Professor Jibin Park
Sun Jul 19, 2015 10:02 PM

Post by Jim Tang on July 19, 2015

for example 3, are you assuming that the price of two slices is $5? is it better to use $/slice bc $/2 slices?

3 answers

Last reply by: Professor Jibin Park
Tue Nov 10, 2015 12:06 PM

Post by Jim Tang on July 19, 2015

wait, shouldn't it say if e<1, then demand is inelastic?

2 answers

Last reply by: Siyun Liu
Thu Feb 5, 2015 7:59 PM

Post by Siyun Liu on February 4, 2015

In example 2, since Q1=200, doesn't e equal 1? If so, isn't this product's total revenue supposed to remain the same? So how comes the total revenue decreased after the rise in price?
Thank you!

1 answer

Last reply by: Professor Jibin Park
Mon Jan 12, 2015 5:21 PM

Post by Carlos islas on November 19, 2014

In example #1 shouldn't your TR2 be p*q=$80*100=8000?

1 answer

Last reply by: Professor Jibin Park
Tue Nov 4, 2014 6:41 PM

Post by Rebecca Dai on November 4, 2014

Professor,
I saw a different function in text book. E of demand= (change in Q/((Q1+Q2)/2))/change in P/((P1+P2)/2). And I plugged in some real numbers and got different results from the function you talks about in the lecture. Which one is right? Thanks!

1 answer

Last reply by: Professor Jibin Park
Wed Oct 22, 2014 5:38 PM

Post by Rebecca Dai on October 21, 2014

Where can I get past ap exam paper? Could you send them to me if you have it? Thanks

2 answers

Last reply by: Professor Jibin Park
Tue Oct 21, 2014 5:27 PM

Post by Rebecca Dai on October 21, 2014

Does unit-elastic only refer to the point instead of a segment? Thanks.

1 answer

Last reply by: Professor Jibin Park
Tue Oct 21, 2014 5:07 PM

Post by Rebecca Dai on October 21, 2014

In the factor of time that determines elasticity demand, is it very similar to the substitute? Because people tend to have more substitute over time.

2 answers

Last reply by: Professor Jibin Park
Tue Oct 21, 2014 5:07 PM

Post by Rebecca Dai on October 21, 2014

What does elasticity demand represent? What does it tell us literally? Thanks.

2 answers

Last reply by: Professor Jibin Park
Tue Oct 21, 2014 5:03 PM

Post by Rebecca Dai on October 21, 2014

1. What is two ways of calculating PED contradict each other? Like one proves it's elastic and the other one proves it's not.
2. If E is 1, is it neither elastic nor inelastic?
Thank you!

1 answer

Last reply by: Professor Jibin Park
Mon Aug 11, 2014 2:21 PM

Post by Tyler Zhang on August 11, 2014

So for questions where the elasticity is asked, there are two possible answers? One from the regular elasticity formula and one from the midpoint method..will both be marked correct?

1 answer

Last reply by: Professor Jibin Park
Thu Aug 7, 2014 7:12 PM

Post by Tyler Zhang on August 7, 2014

Why are there two different values for elasticity when using the midpoint formula as opposed to using the price elasticity of demand formula? What do each of the numbers mean? Which method is more accurate?

1 answer

Last reply by: Professor Jibin Park
Wed Aug 6, 2014 3:56 PM

Post by Tyler Zhang on August 6, 2014

For example 1, why are the revenues not 8000 and 9000? Why are they both 9000..

0 answers

Post by Harshil Bansal on May 5, 2014

Where can I get a bank of multiple choice questions to practice from?

0 answers

Post by Professor Jibin Park on April 23, 2014

Hello, there, Educator community. Have a great day!

1 answer

Last reply by: Professor Jibin Park
Sun Jan 12, 2014 6:58 PM

Post by Jessie Xiao on January 12, 2014

what happens when elasticity of demmand equals 1?

1 answer

Last reply by: Professor Jibin Park
Sun Jan 12, 2014 6:54 PM

Post by Jessie Xiao on January 12, 2014

you made mistakes in example 1 and 2

Price Elasticity of Demand

  • Price elasticity of demand is a measure of how responsive a product is to a change in price.
  • Inelastic demand means that an item is not very price sensitive at that price change (e < 1).
  • Elastic demand means that an item is price sensitive at that price change (e > 1).
  • The formula for elasticity of demand is % change in quantity divided by the % change in price.
  • Perfectly elastic is a horizontal line.
  • Perfectly inelastic is a vertical line.
  • The midpoint method in determining elasticity corrects for changes when you increase vs. when you decrease price or quantity.

Price Elasticity of Demand

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:10
  • II. Product Markets 1:26
  • What is Elasticity of Demand? 2:37
    • Definition of Price Elasticity of Demand
    • Ceteris Paribus
  • Elastic Demand 6:57
    • e>1
    • Product is Price-Sensitive
    • Flat Demand Curve
  • Inelastic Demand 12:02
    • e<1
    • Product is Not Sensitive to Price Change
    • Steep Demand Curve
  • Example 1 19:20
  • Example 2 25:01
  • Using the Midpoint Method to Find Elasticity 30:40
    • Own Price Elasticity
    • Absolute Value Removes Negative Sign
  • Example 3 32:38
  • Example 4 38:37
  • Factors That Determine Price Elasticity 44:06
    • Whether Close Substitutes are Available
    • Whether the Good is a Necessity or a Luxury
    • Time
    • Share of Income Spent of the Good
  • Price Elasticity Along the Demand Curve 47:11
  • Example 5 56:22