00:03
Hello, let's start with the first question.
00:06
When the demand curve looks like this, here we have price, quantity, so when the demand curve is drawn as a vertical line, like this, this is the vertical line.
00:23
As we can see, for any price, quantity demand is exactly the same, it doesn't change.
00:30
So this means that demand is perfectly inelastic.
00:43
Perfectly inelastic.
00:48
There is no any change in the quantity demanded regardless or on any changes in the price.
00:57
The second part.
01:00
The cross price elasticity of demand of an apple is 0 .75.
01:06
So the cross price elasticity of demand by apples and oranges is 0 .75 and this is equal to the ratio of the change in quantity demanded for apples over the change in the price of orange and the price of orange increased by 4%.
01:35
There is 4 % increase and the cross price illicit of demand is equal to positive 0 .75.
01:44
That's why we can find that we have 3 % increase in 3 % increase in quantity demanded for apples...