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How much does quantity demanded change when price changes? By a lot or by a little? Elasticity can help us understand this question. This video covers determinants of elasticity such as availability of substitutes, time horizon, classification of goods, nature of goods (is it a necessity or a luxury?), and the size of the purchase relative to the consumer’s budget. Microeconomics Course: https://mru.io/oyv Next video: https://mru.io/aqh Help us caption & translate this video! http://amara.org/v/GCsX/ 00:00 Introduction 00:51 Elastic vs. Inelastic 01:57 Inelastic Graph Example 02:28 Elastic Graph Example 03:18 Elasticity Rule 04:15 Determinants of Elasticity of Demand 05:09 1. Availability of Substitutes 07:31 2. Time Horizon 09:00 3. Classification of the Good (Broad vs. Narrow) 10:11 4. Nature of the Good (Necessity vs. Luxury) 11:12 5. Size of the Purchase, Relative to Your Budget 12:19 Summary
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