Be able to compute the elasticity of a commodity at any price given the demand function. Use the elasticity function to find the maximum revenue and corresponding price/quantity of the commodity.
What is the relative rate of change of a quantity with respect to price?
How do you calculate elasticity for a situation?
What are the units of elasticity?
What is the formula for elasticity?
What happens if E is less than 1, greater than 1, or equal to 1?
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This lesson explains the concept of elasticity being the relative rate of change of a quantity with respect to price. This is just the introductory lesson, and the next two lessons build on this foundation. This is a great place to start, but make sure to watch the next couple of videos.