Video: Elasticity of Demand

The following video is a little long to watch, but it provides an excellent overview of elasticity and explains both the concept and the calculations in a simple, easy-to-follow way.

You can view the transcript for “Episode 16: Elasticity of Demand” here (opens in new window).

In review:

  • Price elasticity measures the responsiveness of quantity demanded to a change in the product price
  • The calculation for price elasticity is the percentage change in quantity demanded divided by the percentage change in price
  • When the absolute value of the price elasticity is >1, the price is elastic and people are very sensitive to changes in price
  • When the absolute value of the price elasticity is <1, the price is inelastic and people are insensitive to changes in price

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Introduction to Marketing II (MKTG 2005) Copyright © 2020 by NSCC and Lumen Learning is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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