00:01
So here we're talking about elasticity and not just any elasticity.
00:04
We are talking about the price elasticity of demand.
00:10
There are many elasticities, but they generally all refer to the change in quantity, right? so in particular here, since it's the elasticity of demand, we're talking about how much does the elasticity of demand change.
00:27
We are going to compare that to the price.
00:31
So we have the price elasticity of demand is saying, how much does quantity demand it respond to price? economists often call this epsilon, squiggly e, and here we know it's two.
00:43
But it's really minus two, right? because demand curve slope down.
00:47
If the price goes up, quantity is going to be going down, but economists are lazy and often leave off the negative sign, right? whenever you see price elasticity of demand, it should have a negative sign in front of it, we just leave it off because we're lazy, unfortunately.
01:03
So we originally know that we know that there's going to be a change in price of minus 10%...