00:01
So we've got a couple of questions about elasticity here.
00:03
Quick reminder, elasticity is, as always, the percentage change in quantity over the percentage change in price, right? that is the definition of elasticity, and we're told that this is equal to minus 2 .66 for used cards.
00:18
Right.
00:19
Now, oh, sorry, this is an income in elasticity.
00:23
So instead of a price, we have a change in income, right? elasticity always measures how much quantity responds.
00:32
We've got an income elasticity here, so we're thinking about the change in income relative to the change in price.
00:39
We now manipulate this equation, right? the answers involve the quantity of use cars.
00:44
We can solve this for the quantity.
00:46
This implies, right, if i cross multiply, the percentage change in the quantity is minus 2 .66 times the percentage change in income, but we know that incomes are going up by, 10%.
01:00
So the percentage change in quantity is minus 2 .66 times 10%, which is equal to minus 26 .6%.
01:09
Right? so the quantity of used cars demand it will decrease by 26 .6%.
01:16
This is not a shift in the demand curve, right? it's certainly not a shift in the demand curve rightward...