00:01
So here we're talking about elasticity, but not just any elasticity, right? we want the price elasticity of supply.
00:10
And if we just want to think about that in percentage terms, it is the percentage change in quantity supplied over the percentage change in the price.
00:21
That is simply the definition.
00:22
You need to know the definition, right? so, yeah, it's percentage change in quantity supplied over.
00:30
Percentage change in price exactly a so b we are now looking at prices we see that the price goes from 20 to 24 and we see that the quantity supplied goes from 1200 to 2400 so we need to calculate these percentage changes using the midpoints right so the midpoint percent its change is equal to new minus old over midpoint and we do that to make percentage changes symmetrical.
01:05
Normally percentage changes matter relative to the reference point.
01:08
With a midpoint percentage change, it's not relevant.
01:11
It's symmetric.
01:12
We go from a to b or b to a, we get the exact same percentage change.
01:16
So the percentage change in quantity supplied, oh sorry, it's 1 ,400, not 2 ,400...