Episode 16: Elasticity of Demand

[1977sjn]

I am an Economics teacher in Dubai, UAE. I would highly recommend this video not just for students but for teachers as well.!!! "You can never stop learning" and I just did after I viewed the video. Good work!!

[heavym3tal]

I understand that your friend wants to increase profits, but shouldn't she chart a regular supply and demand curve for the various books she sells. I.E- if more customers are buying children's books, demand increases, and therefore price increases.

Thank you for the explanation in price elasticity. And I know that this model is a simplistic one for presentation's sake, but what real world example follows this? I ask because the smoking example is one to institute public policy.

[Mappostolova]

this is so so so helpful

[anttrap321]

one thing i dont understand my textbook introduced the percentage change formula to calcuate price elasticity. but it is rarely used. instead every single question i encounter required the use of the midpoint formula which was barely mentioned in the text. so what is the percentage formula for? when do i use it. thx

[NelsonNellyTeddy]

Actually there is a question I wanna raise. A 10% increase in price should not be leading to a 10% decrease in Qd, 110% x 90% = 99% only, and 1 % of the the total revenue is missing.

[Zannamas]

Thank you for all your effort. I won't let you down! XD

[seadragon36]

I appreciate the concrete examples from the news, the anti-teen smoking price increase and the NY milk price floor in Episode 15 -- it's helpful to see the complexity and unintended consequences of implementing these theories. Thanks for these great videos!

[valverj]

Is there a love button to click?? because i love this video!!

[LethalPierogi]

y is a one dollar increase in the price of gum a big deal? it doesnt really change the demand for it. people arnt going to freak out over a $1 increase in gum. had it been a $3000 increase for lets say a car it would be a bigger deal. as a consumer the price of gum doesnt have a great affect on me

[valverj]

@LethalPierogi a 1 dollar increase over an the already set price of one dollar is a big deal its 100% increase not the actual amount, the %.

[LethalPierogi]

@valverj oh the percent.... tru 

[ashes388]

@LethalPierogi well think from the firm's point...if it does tt then it's customer will shift to a substitute lol ok it wont affect me too either haha

[Tahminaology]

I freaking adore you!

[BigDannyTV]

thank you so much your video has been a huge help...

[TheSteelArmor]

Cute story. Excellent Explanations.

Thank you! :D

[TheSZCross]

Great video and fun!

[Saxenn]

i want a cigarette now

[bddaawwgg]

Do you have any videos on elasticity of supply? I don't like any of the other explanations. Thanks!

[chloe34818]

THANK YOU THANK YOU......UR A LIFESAVER, SERIOUSLY. ITS JUST SO CLEAR AND SIMPLE. Really appreciate it!

[Glenhu123]

thanks this is so much better den my economic lecture

[windintea]

Brilliant!

[mkarun99]

This is a neat and wonderful posting. Thanks for taking the effort. You are really being helpful to many people across the world. Positive Impact made.

[mmmarkym1975]

Excellent



[studentecon]

WHY CAN'T YOU BE MY TEACHER INSTEAD OF THE USELESS PRICK I'M STUCK WITH :-( ...Love the video. With some luck, I'll pass this final tomorrow.

[MegaMadMar]

so easy to understand this way

[unrivaled37]

Thank you for posting these videos! They are helping me study for my AP Micro/Macro exam this coming thursdday!

[dramagalkay]

This is really helpful. It is a lot easier to understand than how my lecturer puts it.

[SuperBlaze999]

how do u answer long 15 mark question is the exam , can u make or show me a video on that please

[SuperBlaze999]

should lower the price ,- is this correct

[mjmfoodie]

@SuperBlaze999 yes, indeed.

[udoit123]

well done madam and I love the stick figures

[AndersonFlamingSacks]

4:30 Ooookaay now whaddo i do? LOL this is really easy to learn though THANKS :) (y)



[KellyK0028]

Really helpful. Thanks.

[vinatious]

Thanks for the video. Its a lot easier watching this than reading a textbook.

[spirituelconnexion]

thank you ^^

[abdullahabdulaziz1]

kuch b samaj mai nai aaing sb sAR K UPPAR SE JAAING

[darkkangel1984]

I dont know as how to thank you???? i dn hv words, u r really great Ma'am. i adore lucky one's to whom u r economics teacher. I dint ever knew abc of economics, i was having a course of managerial economics this semester. It was due to ur lectures that today i had an excellent paper........Thank u, thank u soooooooooooo much, lots of, God bless

[xxx0246]

hate economics, cant get away from it though

[dayjun]

Great lesson, with a beautiful voice to boot ;-)

[FaroukdabashPresents]

Thanks, great video.

I have a test tomorrow and this video gave me a bit more confidence in PED, I understand it much more now.

Thanks again! :)

[sfossum87]

I wish you were my professor I have learned more from you in 10 minutes than I have in my 16 weeks of class

[mani8900]

u saved me!! thnx

[halfpipe302]

this actually may be 10 times worse than "microeconomics: second period swag"

[LavaEagle]

You should think about teaming up with Khan Academy.

[mjmfoodie]

@LavaEagle Maybe KhanAcademy should think about teaming up with me . . .? ;-)

[mrmazoku]

@mjmfoodie Do it, educators that make online videos are amazing people... having them all in a central place makes it easier for students. :)

[samiirsaad]

This video was really helpful, thank you!

[camcam1ful]

I agree with the the other people, this is an excellent video, it helped a lot! thank you

[bananabutton1129]

This video is an excellent tutorial on price elasticity. The video is well written & delivered, all of the examples and concepts are clearly and conscisely explained, the examples are relevant and most importantly, you explain what exactly things mean in a way that is easy to grasp. After listening to your lesson, I believe that your friend should probably lower prices in her book store becasue books are likely elastic in nature so she would see an increase in sales.

Thanks for the lesson!

[feverpitch82]

I need to listen to this a few times because I dont get it. I will let you know how it goes when im in a quieter room with a pen and paper at the ready.

[mjmfoodie]

I recommend that she lower her prices (give a discount) not because I have an exact number, but because I can make an educated guess that her product - children's books at her store - will have an elastic demand (not a necessity to purchase the books, lots of alternative places to acquire books). I'm planning to add one more elasticity video, that addresses characteristics that allow you to predict whether demand will be elastic or inelastic.

[shoaibbtt]

@mjmfoodie Hi there, first of all excellent video i absolutely loved it but if you don't mind me asking a personal question can you tell me whether your a graduate or senior lecturer as i'd like to recommend your videos to my class mates please don't feel i am questioning your explanation of economics and please forgive me mam if i have offended you. I look forward to your reply.

[mrmarygoing]

LOVE this video. I am using it to supplement my dry textbook. Thank you for making it. Having viewed it, however, I still don't know if your friend should lower or raise her prices (or not). How does she get the numbers that are relevant to her?

[alagon]

we should abolish the federal reserve and return to the gold standard. 

[mjmfoodie]

@alagon Not sure how that's relevant to price elasticity of demand for a particular product . . . ?

[alagon]

@mjmfoodie if we used gold as the medium of exchange, then prices for goods and services would drastically decline.

[mjmfoodie]

@alagon Elasticity is how people react to price changes; not whether prices change.

[TheDanielle20009]

@mjmfoodie Doing a course in Managerial Economics could you tell me which method is better The Mid Point Method or the Point Method??? Kinda confused

[McBirdec]

@alagon there isn't enough gold in the world

[alagon]

@McBirdec

Now you're starting to think like a true economist. 

[emgirl21]

this is the best PED video on youtube!!

[atrimmer42]

I think your videos explaining Economic concepts are excellent. They are such a useful teaching and learning tool for students. I am a teacher of Online Economics. Are you happy to give permission for your videos to be downloaded and used if I acknowledge the author? I would simply provide a link to your videos on YouTube, but sometimes YouTube is blocked by schools and sometimes the links to other videos on YouTube, (not yours), are not appropriate for school aged students.

[mjmfoodie]

@atrimmer42 You are welcome to use them.

[atrimmer42]

I think your videos explaining Economic concepts are excellent. They are such a useful teaching and learning tool for students. I am a teacher of Online Economics. Are you happy to give permission for your videos to be downloaded and used if I acknowledge the author? I would simply provide a link to your videos on YouTube, but sometimes YouTube is blocked by schools and sometimes the links to other videos on YouTube, (not yours), are not appropriate for school aged students.

[warinjib]

Great!!

[EntrepreneurPage]

I wish u were my teacher :(

[Mrbalaatyt]

Hatsoff your explanation skills. Its an amazing explanation.

But I have one question here. Why the %change is calculated with respect to average of quantiies or prices. For example when we calculate the any change in a quantity we generally calculate ( difference / actual (old) ). But here its calculated as ( difference/ ((old+new)/2).

Can you please show some light over this problem?

[mjmfoodie]

@Mrbalaatyt That would be the midpoint formula of elasticity -- the issue is that if you calculate the elasticity from point A on a demand curve to point B on a demand curve you will get one value; if you calculate from point B to point A, you will get a different value (because you've changed the denominator). The midpoint formula resolves this (OK, it kind of fudges it) by calculating the AVERAGE of the new & old: (old + new/2).

[Mrbalaatyt]

@mjmfoodie : Thanks for your explanation. What I infer by your statement is, if we move within any two points on a demand supply curve the value should be stay constant. But why we need offset base effect which gives me a distorted value?

[khairasss]

we use your videos is class because our teacher cannot be arsed to teach us.. thanks you sooo much there really helpful :)

[LarisseIsabel]

You are a very good and LIVELY Economist. Because you teach fast with animated and simple illustrations which helps us understand more and clearly about the topics that are given in our economics Class. :) 5 stars for you.

[mjmfoodie]

Thanks! Hopefully my own students share your opinion.

[LarisseIsabel]

Well, if they are really interested to learn what you are teaching, I know they will appreciate it. :)

[praveenreddykv]

God blessed you with a wonderful voice, and your vocabulary and flow of thought is really amazing, Crisp and concise .... Thanks a Lot, God Bless You.... :)

[PwNStaaRR]

This is the BEST, so many examples which are GREAT...

[korrisha]

wonderful vids keep em coming mjfoody keep em coming u got the best economic notes for real

[Bahrainiproud]

I really like it!! Thank you sooo much

[amyfilms]

Love these illustrations! Great explanation.