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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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