00:01
So here we're talking elasticity, right? and in particular the elasticity of demand.
00:06
And this is normally given as the percentage change in quantity with respect to the change in price.
00:13
But this is what i would call arc elasticity, right? and here we have a point, right? we have a point.
00:22
So the point version of this, if you've only got one point, is dq dp times p over q, which is point elasticity.
00:34
And this makes calculating it so easy.
00:37
So for example, for the first blank, you might say that if p is equal to 30, well, i know that dq dp is equal just to the slope minus 10.
00:50
And i know that quantity will be equal to 400 minus 10 outside of 30 is equal to 100.
00:57
So the elasticity is going to be minus 10 times 30 over 10.
01:04
Oh, sorry, this is 100, 100.
01:06
So this would be minus 300 over 100 is equal to minus 3.
01:11
Great, right? really simple to do.
01:14
For the second blank, if quantity is equal to 400, well, now we have to, we've got to sort of get p.
01:22
So we have 400 is equal to 400 minus 10p.
01:26
This implies that p is equal to zero, right? so this is at one of the endpoints of the elasticity curve...