Types of Elasticity of Demand Video Lecture | Business Economics for CA Foundation

okay today I'm going to talk about
different types of with elasticity as we
have learned in the past few weeks we
know that there are four kinds price
elasticity of demand price elasticity of
supply cross elasticity of divide and
income elasticity of demand okay before
we start we have to know what is elastic
and inelastic elastic is where people
don't need a product immediately it
isn't something that laid by every day
iPhones like houses in other words is
not the necessary things that we need
for our living and as for inelastic a
product that people need immediately
things that they need to survive things
that they are super important to learn
like rise like water well it is the
basic for our living as a human being
okay let's look at the graphs first and
you can see at the top of the left
there's an inelastic demand for the
price of last year of demand and as you
can see when the price is creased the
quantity only changes a little it means
that people need them so they were
bought it no matter how the prices
changes and but in contrast if you look
at the lower one the elastic demand you
can see when the price decrease a little
the quantities grows a lot it means that
people will be very desired to buy if
the prices only decrease only a little
on the right you can see they are both
ideal situations the upper one is in the
elastic demand it means no matter how
the price changes that the amount won't
change and the Laura shows us no matter
what's the what's the demand the price
won't change however it also means that
price falls down a little after a week
sorry if the price falls down a little
it means that the demand will fall so
zero because that's it's the ideal
situation that people are seeing and for
the price elasticity of supply is a very
very similar concept for the ideal
situation is that perfectly inelastic
supply and perfectly elastic supply they
are the same concept as the demand
because when uh perfectly inelastic
supply means that no matter how is the
price the supply won't changes and
perfectly elastic supply means no matter
how demand change the price will never
change and an elastic supply and elastic
supply they are also was similar as what
I have talked about the price elasticity
of demand okay and a coefficient of
elasticity Co EE it is just a very
simple formula but Rory will be present
age / veeraiah a present age okay price
elasticity of demand PE D this is a
measure of a relationship between a
change in quantity demanded of a
particular good and a change in its
price that means it's the relationship
between the demand and the price the
change in demand and the change in price
and the formula for that is PE D because
a change in quantity demanded of the
product divided by the change in the
change in price of the product and
usually when you have finished
calculating PE you need to explain why
the quantity demanded is either elastic
or inelastic and let's look at it well
as I just said before we have to explain
and the number if the number we
calculated is less than 1 which means
the P DS is inelastic with me which
means the product is the things that we
need every day and if it's greater than
1 which is elastic it means they are not
unnecessary
that we need for life an affair zero
which is perfectly in elastic or
infinite which is perfectly in elastic
which is a graph I have talked before
okay for cross elasti elasticity of
demand this measures the responsiveness
of the quantity demanded of one GS as a
result of the change the price of energy
is all it means it is it's also between
the relationship of the quantity and a
price but it is in two different
companies they are comparing their
quantities in the price or I was said
that is the house the one company's
price will influence other company's
quantity demanded and the formula for it
is the change in percent in Kona Nui
mana of good X divided by corner change
and a change in price of good-y um it's
the same process when you have finished
the calculating XE d which is cross
elasticity of demand you need to explain
the effects that quantity demanded of
good-x has had on the presentation in
price of good-y
well I will explain that later after I
have talked through about the four
concepts or the four types of elasticity
okay income elasticity of demand which
is it's the measure of the
responsiveness of the corner demanded of
a GS as a result of a change in the
income of a consumers demanding good
which means it's not only between
prattler relationship between price and
demand and it is a relationship between
the people's income and the quantity
demanded and the formula for it is the
percentage change in quantity demanded
and the president change and the income
now once you have finished calculating
ye d which is income
city of the month you need to talk about
whether or not the quantity demanded is
an inferior or no more good and then an
inferior good is where income elasticity
is negative which is the number we're
calculating and the normal good is where
income elasticity is positive okay and
this is the last type of elasticity
which is price elasticity of supply PE s
it is the mashers the responsiveness of
the quantity supplied of GS as a result
for change in price of product but
formula for it is the present a change
in quantity supplied and the present a
change in the price which means they are
the relationship between the quantity
supplied and the price of the product
and after you have calculated the price
elasticity of supply you need to explain
whether or not the number is elasticity
of elastic or in elastic sorry okay
let's look at some relationship between
types and codes different types of goods
and services for inferior Goods it's
very common like city bus service a
normal good public transportation like
cars taxi
motorbike maybe and for luxury goods I
would say like brokerage houses or
Ferrari Lamborghini or lb bags and so on
and for substitute Goods more garyun and
butter or powdered and liquid laundry
there are the things that are very
similar or another example is burger and
sandwich and for compliment that it's a
toothbrush and toothpaste which is to
Bro the products they need to use
together to have a real functioning to
have the real functions right and all
the ways that the last
impact the decisions of different
stakeholders for PD they have to
consider the time period and the income
that was spent a degree of necessity the
number and closeness of substitutes and
as for xcd we have to consider the
substitutes which I have talked before
is the two goods are substitutes and
I'll explain our side when exodus
cackling number is positive that means
the products we are calculating they are
substitutes however if it if the number
is negative it means the two goods are
complements and complements is like
toothpaste and toothbrush which I have
explained before last row asked for ye D
is a normal good if the normal if it's
normal good it means that income
elasticity is positive and very good it
means income elasticity is neck just as
I talked about before and for PE s the
last one we have to consider time
periods and the stocks applied so yeah I
think that's pretty much for my our
teams presentation I won't say that we
prepare very well but I would say that
we try very hard to do it so anyway
thank you