Lecture Overview:

The topic in this video lecture is on elasticities of demand and supply for products. As an entrepreneur, it is important to know the price elasticity of demand and the price elasticity of supply for a product that you might produce and sell. Suppliers of products spend millions of dollars in advertising in an attempt to change the elasticity of the product they sell! It is fascinating material.

This chapter is the longest chapter in the course. For that reason, I have broken up the chapter into two modules over two weeks. This week's module covers up to but not including Tax Incidences in chapter 6. Tax Incidences is discussed in this video lecture but you can ignore that portion this week. Tax incidence will be the topic next week.

There is a lot of material in it and it uses a lot of arithmetic. So get out your pencil and paper and do the drawings and calculations that I do in it. You will learn the material faster and deeper because you will be learning by doing. It is a much better way of learning than just watching and listening to me. The brain becomes more active when you take notes and do the calculations and drawings.

The material in the video is a wonderful preparation for your chapter 6 practice quiz, your chapter 6 testing quiz, and for your midterm.

I also suggest you have your textbook near you so that you can relate the material in the textbook to my video lecture.

Link to Document Used in this Lecture:

Elasticity Formulas

Please download the file and if you can print it out. You can refer to it as you watch the lecture. Use this document for your Practice Quiz and for your Testing Quiz.

Link to Video Lecture:

Watch My Elasticities of Supply and Demand Video Lecture

Recording Menu:

This video is about 53 minutes long.

Below is a menu that lists the topics and the time they are discussed on the video. Use your horizontal lever while watching the video to move to the topic you wish to review.

Time: Topic:

00:36 The Elasticity of Demand

10:56 The Determinants of the Degree of Elasticity of Demand

14:01 Elastic Demand Curve: Straight Line

15:21 Inelastic Demand Curve

15:40 Another Elastic Demand Curve that is Curved

16:04 Relative Elasticity of Two Curves

16:12 Perfectly Elastic Demand Curve

16:42 Perfectly Inelastic Demand Curve

17:09 Measuring Elasticity: The Formula : Ep = % change Qd / % change P

18:06 The Meaning of Elasticity Mathematically: Elastic, Inelastic, & Unit Elastic

20:22 Elasticity of Demand of Selected Goods and Services

21:37 Mid-Point Explanation: How to Figure Out a Percentage Change for Quantity Demanded or the Price

23:26 Mid-Point Explanation: How to Figure out the Elasticity Co-Efficient

25: 27 Mid-Point Formula

25:55 Mid-Point Formula Example

29:04 Elasticity of a Straight Line Demand Curve

30:12 How Advertising Can Change a Products Elasticity

30:42 Elasticity and Total Revenue Example Using the Mid-Point Formula When the Product is Elastic

32:01 Elasticity and Total Revenue Example Using the Mid-Point Formula When the Product is Inelastic

33:48 Summary of Elasticity and Total Revenue

34:20 Income Elasticity of Demand

35:53 Cross Price Elasticity of Demand

38:31 Elasticity of Supply

41:32 Relative Elasticities of Supply

41:37 Elasticity Over Time

42:20 Supply: The Short Run and the Long Run

42:56 Graph Comparing a Short Run Inelastic Supply Curve to a Long Run Elastic Supply Curve When Demand Increases

43:44 Part 2: Tax Incidence (watch this topic next week)