00:01
So here we've got a couple of questions about elasticity.
00:02
We know elasticity is the percent change in quantity over the percent change in price.
00:07
And we're told here that it's minus 0 .3, right? it's got to be negative.
00:11
That tells you the demand curve is sloping down.
00:14
So now we're also told that the percent change in price is equal to 10 percent.
00:20
So we can rearrange this formula to solve for the quantity of potatoes demanded, right? the percent change in quantity will equal to minus 0 .3 times the percent change in price, which is equal to minus 3 percent.
00:33
So we manipulate the elasticity formula.
00:36
I multiply each side by the percentage change in price, and i can solve for the change in the quantity demanded.
00:43
Now, the key thing is here about sales of potatoes, which is what we're thinking of, are equal to price times quantity...