@stretchyrubberbands You are correct about the limit idea but we can't always use point elasticities. We use which formula we have information for. Sometimes we ONLY know two prices and two quantities- think of yourself as a shop owner. Other times, we might estimate a demand line from lots of data, and calculate elasticity from the slope at one P and Q. There are many other uses and cases- see my "Demand elasticity back of envelope" video for a fun one.
@fredwardNO1 As Sal said, "wrong" and "right" are just by convention. MOST econ books use the average as the base, what we call the "midpoint method". However, Besanko and Braeutigam's Microeconomics (for example) uses the "wrong" way. But, these authors come from more of an engineering perspective than a traditional economics perspective. The most important thing is: Know what your teacher/tester/employer expects! See my channel for more on elasticity.
The "wrong" way is what I have been taught for my A-level economics test next week :/ I checked with the text book made this year and it says that the "wrong" was is actually the correct way
12 ปีที่แล้ว
In my case we usually had the actual equation of the Demand curve so we often used this formula as an alternative method: Ed=(P/Q)*(Q') (where Q' is the derivative of the formula cleared for Q) Is there a formula like this one that works as an alternative method for the "RIGHT" way?
@Harrisam66 When you learn synthesize ecstasy, you will need to find out a optimum way to sell it on a market, so that why you are here. Ha ha just kidding :) I am electrical engineering student and still find these videos very usefull, to understand a world around us.
@BurkeyAcademy good that people know that some econ classes expect it the other way. I will make an annotation
Thanks so much for this Sal, to be honest i wondering the same thing on why my college professor had a different approach to this..
@stretchyrubberbands You are correct about the limit idea but we can't always use point elasticities. We use which formula we have information for. Sometimes we ONLY know two prices and two quantities- think of yourself as a shop owner. Other times, we might estimate a demand line from lots of data, and calculate elasticity from the slope at one P and Q. There are many other uses and cases- see my "Demand elasticity back of envelope" video for a fun one.
Omg thank you for making this vid. I know this is 12 years ago but bro it’s helping me so much 🙏
@fredwardNO1 As Sal said, "wrong" and "right" are just by convention. MOST econ books use the average as the base, what we call the "midpoint method". However, Besanko and Braeutigam's Microeconomics (for example) uses the "wrong" way. But, these authors come from more of an engineering perspective than a traditional economics perspective. The most important thing is: Know what your teacher/tester/employer expects! See my channel for more on elasticity.
The "wrong" way is what I have been taught for my A-level economics test next week :/ I checked with the text book made this year and it says that the "wrong" was is actually the correct way
In my case we usually had the actual equation of the Demand curve so we often used this formula as an alternative method: Ed=(P/Q)*(Q') (where Q' is the derivative of the formula cleared for Q)
Is there a formula like this one that works as an alternative method for the "RIGHT" way?
Hey Khan , upload some advanced function videos
awesome
but why do we need have same change from A to B and vice versa.
wouldn't traditional approach make better sense.
Hi! I was confused too but he explains it really well in this vid: th-cam.com/video/slP8XZ6Nq40/w-d-xo.html at about 6 minutes and onwards :)
Yea i wonder too
IS this for college Students?
@Harrisam66
When you learn synthesize ecstasy, you will need to find out a optimum way to sell it on a market, so that why you are here.
Ha ha just kidding :) I am electrical engineering student and still find these videos very usefull, to understand a world around us.
@Harrisam66 Reacting to Sal's awesomeness.