00:01
So here we're talking about the intersection of elasticity and marketing, right? and the energizer wants you to buy energizer battery rates.
00:09
So the goal here is to make customers or to make demand inelastic, right? inelastic demand is the goal of any company, right? you want an elastic demand, right? why would you want inelastic demand? well, remember that elasticity is equal to the percentage change in quantity over the percentage change in price.
00:36
So this is less than one, or in general, it is small when inelastic.
00:43
Why do we want this fraction to be small? well, let's suppose that we raise price by 10%.
00:50
And we want to raise prices.
00:52
Of course, we're business people.
00:53
If we can raise prices, that's really great.
00:55
The elasticity means of being low means that the change in quantity has got to be substantially less than 3%.
01:04
So it's got to be minus.
01:05
If we raise prices, quantity is going to go down...