Video: Elasticity of Demand

The following video is a little long to watch, but it provides an excellent overview of elasticity and explains both the concept and the calculations in a simple, easy-to-follow way.

You can view the transcript for “Episode 16: Elasticity of Demand” here (opens in new window).

In review:

Price elasticity measures the responsiveness of quantity demanded to a change in the product price
The calculation for price elasticity is the percentage change in quantity demanded divided by the percentage change in price
When the absolute value of the price elasticity is >1, the price is elastic and people are very sensitive to changes in price
When the absolute value of the price elasticity is <1, the price is inelastic and people are insensitive to changes in price

LICENSES AND ATTRIBUTIONS

Elasticity of Demand Introduction. Provided by: Lumen Learning. License: CC BY: Attribution

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