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Describe elasticity of demand in your own words.

The demand is inelastic when $E<1,$ elastic when $E>1$ and unit elastic when $E=1$

Calculus 1 / AB

Chapter 6

Applications of the Derivative

Section 3

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

Derivatives

Differentiation

Harvey Mudd College

University of Michigan - Ann Arbor

University of Nottingham

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.

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In mathematics, a differentiation rule is a rule for computing the derivative of a function in one variable. Many differentiation rules can be expressed as a product rule.

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six point three. Number four wants you guys to describe the last to see in your own words, so to do it in your own words, you should probably try it first and then look at this video to make sure you've included all the information. So just start with Let's discuss what Alas to see actually is. So I'm going to try and take this out. There we go. Elasticity is how sensitive demand is, too a change in price. So basically, if you increase the price a lot, does the demand for an item go down because people don't want to pay for it. If you decrease the price, does demand go way up because now people are willing to pay for it, and that's what elasticity measures. So if price increases, does the demand go down? If price decreases, does the demand for the item go up these air? Essentially, the two relationships you're trying to look at and how much change? No. Another way to describe it is how much a change in price affects the demand of an item, So these are just a couple of things to think of. This is how I would describe elasticity when other thing to discuss is to actually interpret the values for E. And we've done a couple do a couple of examples. If your elasticity is less than one, that means you have an elastic demand. An elastic demand means that a change in price has little effect on the demand. So if you increase it or decrease the price, you're actually not changing the demand a whole lot. But if is greater than one, you have elastic demand, which is essentially the reversed effect. The change in price guys affect the demand, and in the last case we have is that is equal to one. And then that's pretty much saying that a change in price equally effects the demand. So you're gonna have. It's like a tradeoff. You could increase the price little. He'LL increase demand a little, so you're gonna have an equal trade off if he is equal to one

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