00:01
What does the price elasticity of demand measure? what is inelastic demand? and what is elastic demand? the price elasticity of demand measures the degree to which a change in price affects unit sales.
00:49
The unit sales of a product with inelastic demand are relatively insensitive to the price charged for the product.
01:47
A great example of this, of something with inelastic demand, is gas.
02:00
Even we saw gas prices recently just go up and up and up.
02:03
They started to come down a little bit, but they're still drastically up from what they were even a year ago.
02:10
However, if you look at our demand, our demand did not go down at the same rate the price went up.
02:18
In fact, our demand went down very little in comparison to how much the price went up.
02:22
And this is because our demand for it is inelastic.
02:25
We still need to go to work.
02:27
We still want to do things.
02:28
We still want to go to the store and get groceries.
02:30
We still maybe want to go out to dinner...