Elasticity Along The Demand Curve. A video covering why elasticity varies along a linear demand curve. Instagram: @econplusdal Twitter: / econplusdal Facebook: www.facebook.c...
I'm guessing the intuitive explanation to this is: even if gasoline (inelastic product) is unreasonably priced no one will want to buy it eventhough it is still a very desired product. Thus when the price is lowered a little bit, a very large amount of people will immediately queue up at the gas station since it's still a necessity product, and as the price lowers bit by bit, less and less people will queue up since the majority already had their fill. (correct me if I'm wrong).
@@bishalpaul152 Yeah but an inelastic good today isn't necessarily an inelastic good tomorrow. E.g. gasoline might be inelastic today but when everyone drives electric in 50 years, driving a car with a petrol motor might become a fun leisure activity for upper middle class who kept their fancy gasoline cars. If gasoline becomes expensive they're more prone not to buy it for their leisure activity i.e. it became elastic (demand falls rapidly when price increases). Lol random story
What I don't understand is if every demand curve is half elastic and half inelastic. Why do we then say that a steep demand curve is inelastic and a gentle slope is elastic. Wont the steep demand curve be half elastic and half inelastic as explained above and the same for a gentle slope. Thanks Sara
@@nonsoottih7405what apt timing. This is not a helpful reply at all. We do not ask questions just to be blown off and told to wait, we ask questions because we are strongly compelled to by our own curiosity. If you know something, why be so pompous as to leave a message, but in that message refuse to answer anything? It’s infuriating, not just because of your conduct, but also because I have been mulling over this question for an unhealthy amount of time, and told my by economics tutor (I’m seventeen) to move on, and you sound eerily similar to my economics tutor in this instance. Please do better, some people actually have a passion for learning, it’s mean to get them to wait any longer.
@@barnred8887 I don’t know the reason myself mate 😂😂😂 I’m 18, about to study econ at university. I didn’t say that to annoy the person, I said it because it’s true, it’s something you learn at Uni
Awesome video, but I still have one question: If we were to look at the change from a $10 to $5 based on the graph in the video, isn't the price elasticity from that scale also perfectly elastic? (%ΔD = 5 - 0 / 0 = ∞ )
Actually if you find the limit of x/0 to infinity (or anything really) you will find the answer to be infinity. The error means ‘undefined’ as infinity is technically not a number but a concept, so your calculator does not realize the calculation as an actual number giving an error.
@EconplusDal - Can we say that value of slope of a demand curve will be affected by the factors affecting PED? Please, if you can answer this question.
not for where a demand curve is perfectly inelastic because price doesn't change therefore you would be dividing the percentage change of demand by 0 which through math law you can't do
Archie Thackray they bring things like this up in multiple choice - not in such depth but if you can make a link to a Revenue curve in a essay Q shows you know your shit inside out...
no, in here it is infinity (-, but we ignore this as this is just because of law of demand). When you divide something by zero you get undefined (as you get +-inf), however in PED there is a limited range i.e. no positive infinity, therefore when you divide by zero you only get one value, therefore, it is defined. I think not 100% sure though.
i dont think its necessary, in the same way asymptotes never reach infinite slope, makes sense that you could have a curve that is not perfectly rigid but still has everypoint inelastic, that would be really hard to make tho, and it probably wouldnt be a reflection of a existing good, it would be just some demand function made to be that way. but if its a linear curve, of course it has to have points that are elastic.
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You just helped me solve the mystery in 8 minutes.
Very natural gift for teaching and very clear concepts. Really glad to have come across this great teacher
I'd like to say this is the best video to explain why the upper half of the demand curve has elasticity.
;): 1:19
Mathematical Proof: 1:30
Simple Explanation (for essay): 6:10
PED and TR: 6:58
Eeeeeelasticity😂😂😂
Very clear explanation. My teacher went over it in class but didnt quite understand it. Thank you very much
thank you bro, i have an exam tomorrow, and no time to read the books, this is just what i wanted to know. thank you
“You queue before you pee!”
- EconplusDal, 2017
I promise I won't ever forget the formula jaja
I'm guessing the intuitive explanation to this is: even if gasoline (inelastic product) is unreasonably priced no one will want to buy it eventhough it is still a very desired product. Thus when the price is lowered a little bit, a very large amount of people will immediately queue up at the gas station since it's still a necessity product, and as the price lowers bit by bit, less and less people will queue up since the majority already had their fill. (correct me if I'm wrong).
It's inelastic because it's a essential product. Most of essential product are inelastic to the priceb
@@bishalpaul152 Yeah but an inelastic good today isn't necessarily an inelastic good tomorrow. E.g. gasoline might be inelastic today but when everyone drives electric in 50 years, driving a car with a petrol motor might become a fun leisure activity for upper middle class who kept their fancy gasoline cars. If gasoline becomes expensive they're more prone not to buy it for their leisure activity i.e. it became elastic (demand falls rapidly when price increases). Lol random story
That was amazing!!! Finally grasped this idea. Thanks so much!
"anything divided by zero is infinity" a mathematician just had an aneurysm somewhere
What I don't understand is if every demand curve is half elastic and half inelastic. Why do we then say that a steep demand curve is inelastic and a gentle slope is elastic. Wont the steep demand curve be half elastic and half inelastic as explained above and the same for a gentle slope. Thanks Sara
You will learn why in university
@@nonsoottih7405what apt timing. This is not a helpful reply at all. We do not ask questions just to be blown off and told to wait, we ask questions because we are strongly compelled to by our own curiosity. If you know something, why be so pompous as to leave a message, but in that message refuse to answer anything? It’s infuriating, not just because of your conduct, but also because I have been mulling over this question for an unhealthy amount of time, and told my by economics tutor (I’m seventeen) to move on, and you sound eerily similar to my economics tutor in this instance. Please do better, some people actually have a passion for learning, it’s mean to get them to wait any longer.
@@barnred8887 I don’t know the reason myself mate 😂😂😂 I’m 18, about to study econ at university. I didn’t say that to annoy the person, I said it because it’s true, it’s something you learn at Uni
@@nonsoottih7405 💀 i owe you an apology. Def projecting some of that Mr thong onto u mb.
@@nonsoottih7405bro he took that mad PERSONALLY 😂
online learning is hell and this just saved my ass! Thanks!
What a lad. You're doing god's work out here dawg. he might just make me a career. Pls upload college freshman vids in 2021
I coulve never understood this without this video I'm surprised I understand so well, thanks a billion
Thanku sooooo much for this tutorial !! This is sooo helpful !!
Saved my day.Thanks a lot.
Thank you, it's well explained and presented!
very good video! but I have only one question that is why the change in Qd from 10 to 9 is infinitive
Thanks sir love from India💗
Hi Sir,
Another amazing video as usual. How would I use this as an evaluation point as I am finding it hard to do so?
Thanks
what a legend!!!,
Awesome video, but I still have one question: If we were to look at the change from a $10 to $5 based on the graph in the video, isn't the price elasticity from that scale also perfectly elastic? (%ΔD = 5 - 0 / 0 = ∞ )
1:57 uhhh doesn't anything divided by 0 give math error
but in econ i think you'd have to just call it infinity
Actually if you find the limit of x/0 to infinity (or anything really) you will find the answer to be infinity. The error means ‘undefined’ as infinity is technically not a number but a concept, so your calculator does not realize the calculation as an actual number giving an error.
Many thanks. A trap for anyone, constant gradient is not constant PED.
@EconplusDal - Can we say that value of slope of a demand curve will be affected by the factors affecting PED?
Please, if you can answer this question.
Amazing explanation, thank you!
Thanks for the good explanation
You are amazing 😘
superb...u r great..thank you so much
Dal The Man!
Huge respect❣
Just a quick question, does this apply to EVERY demand curve? Even for the extreme cases of very elastic and very inelastic?
not for where a demand curve is perfectly inelastic because price doesn't change therefore you would be dividing the percentage change of demand by 0 which through math law you can't do
How would this ever come up in an exam though? Do we really need to know this in detail? Great video I'm just wondering.
Yeah I was going to ask the same question, do I need to know this for A2 AQA specification
Archie Thackray they bring things like this up in multiple choice - not in such depth but if you can make a link to a Revenue curve in a essay Q shows you know your shit inside out...
Its in the AQA textbook, so I think you should know it.
Yes you need to know this - important bit of theory for all exam boards
@@EconplusDal thank you
We know now why its more elastic/inelastic, but why is the model shaped in that way?
Amazing.....!!
But why does higher price have elastic demand and lower price have inelastic demand
Thank you so much!!!
thanks! very helpful
perfect!!!
Dal, how can this graph represent inelastic and elastic demand, if it's a proportional graph?
A/x as x -> 0 is indeed infinity, but A/x where x = 0 is undefined
no, in here it is infinity (-, but we ignore this as this is just because of law of demand). When you divide something by zero you get undefined (as you get +-inf), however in PED there is a limited range i.e. no positive infinity, therefore when you divide by zero you only get one value, therefore, it is defined. I think not 100% sure though.
Shouldn't this graph be a curve?
My brain clicked when he said this at 6:20
thank you
LEGENDDDDDDDDDDDDDDDDDDDDDDDDD
This makes sense but then does it mean that an inelastic demand curve, with a steep slope, has an elastic section?
unless it's perfectly inelastic it will have an elastic part
i dont think its necessary, in the same way asymptotes never reach infinite slope, makes sense that you could have a curve that is not perfectly rigid but still has everypoint inelastic, that would be really hard to make tho, and it probably wouldnt be a reflection of a existing good, it would be just some demand function made to be that way. but if its a linear curve, of course it has to have points that are elastic.
price elasticity is never below 0
Wow!
thanks dal but im sure this is not on the ocr spec therefore its not required to know right
Always required for all exam boards - important bit of knowledge
Eeelasticity🤣🤣
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wow! really standard accent!
Eeeelasticity
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Thank you so much you don't know how much you have helped me 🥲💖