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Describe elasticity of demand in your own words.

Anyone who sells a product or service is concerned with how a change in price affects demand.The sensitivity of demand to changes in price varies with different items. Luxury items to bemore sensitive to price than essentials.One way to measure the sensitivity of demand to changes in price is by the relative change - theratio of percent change in demand to percent change in price. If q represents the quantitydemanded and P the price, this ratio can be written as$\frac{\Delta q / q}{\Delta p / p}$Where $\Delta q$ represents the change in $q$ and $\Delta p$ represents the change in $P$ . this ratio is alsonegative, because $q$ and $p$ are positive.Simply the elasticity of demand measures the instantaneous responsiveness of demand to price.Let $q=f(p),$ where $q$ is demand at a price p. the elasticity of demand is$$E=-\frac{p}{q} \cdot \frac{d q}{d p}$$

Demand is inelastic if $E<1$Demand is elastic if $E>1$Demand has unit elasticity if $E=1$

Calculus 1 / AB

Chapter 14

Applications of the Derivative

Section 3

Further Business Applications: Economic Lot Size; Economic Order Quantity; Elasticity of Demand

Derivatives

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University of Michigan - Ann Arbor

Idaho State University

Lectures

04:40

In mathematics, a derivative is a measure of how a function changes as its input changes. Loosely speaking, a derivative can be thought of as how much one quantity is changing in response to changes in some other quantity; for example, the derivative of the position of a moving object with respect to time is the object's velocity. The concept of a derivative developed as a way to measure the steepness of a curve; the concept was ultimately generalized and now "derivative" is often used to refer to the relationship between two variables, independent and dependent, and to various related notions, such as the differential.

06:17

In calculus, derivatives are mostly used to measure the rate of change of the function at the points. Obviously, it has several major applications such as increasing and Decreasing Functions, Tangent and Normal to a Curve, Minimum and Maximum Values, Newton's Method, and Linear Approximations.

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question number four, we need to explain what does elasticity means? Elasticity simply is the ah the percentage off the difference in demand toe the original demand. So the change in price compared toa original price. So if rusticity is the instantaneous responsiveness off price, do it to a change in demand or vice versa. So de que is the amount or the change value off demand? And here we compare it to the original demand. And the elasticity is a relation between that and the corresponding change in price compared to the original price. So elasticity simply measures. How would that change in demand have fix the price or vice versa? If we increased the price, for example, what would happen to demand so elasticity makes this ah relation so that we can measure demand by price or price by teammate

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