Calculating the Elasticity of Demand

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Elasticity of demand is equal to the percentage change of quantity demanded divided by percentage change in price. In this video, we go over specific terminology and notation, including how to use the midpoint formula. We apply elasticity of demand to the war on drugs, and more broadly to the prohibition of a good when it has an elastic demand. • Microeconomics Course: https://mru.io/5qm • Next video: https://mru.io/x0c • Help us caption translate this video! http://amara.org/v/GCsY/ • 0:00 Introduction • 0:39 Mathematics of Demand Elasticity • 02:55 The Midpoint Formula for Elasticity • 05:23 Example Walkthrough • 07:27 Elasticity of Demand and Total Revenue • 11:59 Practice Question • 12:50 Applications of Elasticity of Demand • 14:06 Profiting from Bad Times

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