00:01
Hello.
00:03
Here we will find the percentage change in quantity.
00:12
So the percent change in quantity, it will be equal to percent change in price multiplied by the amount of elasticity, price, elasticity of demand and now let's calculate the price change so you asked me to use average prices so we use the midpoint formula so the new price will be one dollar and 20 cents the all price is 80 cents and the midpoint is one so the percent change in price is 0 .4 and we multiply this by the price plasticity of demand which is 0 .8 and as a result the price the percent change in quantity will be 0 .32 or we can write like 32 so you ask me to write in percent.
01:41
So it will be 32%.
01:44
Please type this number, 32%.
01:48
And we don't include a negative sign.
01:52
So that's why i don't put a negative sign.
01:54
Of course, since price elasticity is always negative, it should be negative.
02:00
It should be negative, but you ask me don't include this sign.
02:04
So please enter.
02:06
32.
02:09
And now the second question, will total expenditure increase or decrease? so we can see that price elasticity of demand is equal to 0 .8, which is less than 1.
02:29
This means demand is inelastic.
02:35
And when demand is inelastic, highest price yields highest price yields, highest price...