An interesting case of price elasticity of demand is a demand curve with a constant unit elasticity. Explore what such a demand curve would look like in this video. Created by Sal Khan.

Walk through the logic of determining what kind of good has the most elastic demand in this video.

There are several factors that affect how elastic (or inelastic) the price elasticity of demand is, such as the availability of substitutes, the timeframe, the share of income, whether a good is a luxury vs. a necessity, and how narrowly the market is defined. We explore each of these in this video.

Why we calculate percent changes in a strange way when calculating elasticities. Created by Sal Khan.

Economists use the concept of price elasticity of demand to describe how the quantity demanded changes in response to a price change. In this video, explore a simple way to calculate the price elasticity of demand, how to interpret that calculation, and how price elasticity of demand varies along a demand curve.

This flash animation for the song "Irreplaceable" demonstrates how the availability of substitutes affects the price elasticity of demand. Beyonce notes that her current boyfriend is not "irreplaceable," meaning that her demand for him is elastic.

Looking a bit deeper at why elasticity changes despite having a linear demand curve. Created by Sal Khan.

In this video, take a deeper dive into the total revenue rule and the relationship between total revenue and elasticity. Created by Sal Khan.

Examining the two extremes of elasticity, perfectly elastic and perfectly inelastic demand, can help us beter understand the intuition behind this measure. Created by Sal Khan.

Principles of Macroeconomics 2e covers the scope and sequence of most introductory economics courses. The text includes many current examples, which are handled in a politically equitable way. The outcome is a balanced approach to the theory and application of economics concepts. The second edition has been thoroughly revised to increase clarity, update data and current event impacts, and incorporate the feedback from many reviewers and adopters.Changes made in Principles of Macroeconomics 2e are described in the preface and the transition guide to help instructors transition to the second edition.

By the end of this section, you will be able to:

Calculate the price elasticity of demand
Calculate the price elasticity of supply

One of the most practical applications of price elasticity of demand is its relationship to total revenue. A seller who knows the price elasticity of demand for their good can make better decisions about what happens if they raise or lower the price of their good. Explore the relationship between total revenue and elasticity in this video. Created by Sal Khan.