00:01
So here we have an elasticity of minus 0 .2.
00:03
This elasticity is inelastic.
00:07
And it's inelastic because the magnitude that is ignoring the minus sign is less than one, right? remember, elasticity is capturing percentage change in quantity over the price.
00:20
But inelastic, it means that this is small and that this is big.
00:25
So when the price changes a lot, people don't really change how much health care they they buy, right? this is what we're talking about.
00:37
So as the question says, the question is, how can this be small? and of course, this has to do with the nature of health care, right? health care is very different than most commodities, right? buying health care is very different than deciding what kind of car you're going to buy or how often you're going to go to the movies or how big a house you're going to live in.
01:04
Here, what this is saying is that when you're sick, you buy regardless of the price...