Module 4: Elasticity

Why this module matters

It helps learners connect Module 4: Elasticity to the broader course path in Principles of Microeconomics — Part 3: Elasticity & Consumer Demand. Learners build working familiarity with Price elasticity of demand, Elastic demand, and Inelastic demand. The lessons stay grounded in concrete examples and explanations tied to this module's core topics. Learners can check understanding through 17 quiz questions tied to t….

What this module covers

• Price elasticity of demand
• Elastic demand
• Inelastic demand
• We divide elasticity into ranges The demand for a good is said to be elastic with respect to price if its price elasticity is more than 1.
• The demand for a good is inelastic with respect to price if its price elasticity is less than 1.
• Explain the concept of elasticity.

Topical takeaways

• We divide elasticity into ranges The demand for a good is said to be elastic with respect to price if its price elasticity is more than 1.
• The demand for a good is inelastic with respect to price if its price elasticity is less than 1.
• Demand is unit elastic with respect to price if its price elasticity is equal to 1.
• And so when we calculate elasticity, we have that percent change in quantity, and that is also three 11ths.
• So that's a really nice quality of elasticity where the same percent change in price, so percent change in quantity in this case, is 24 units different.
• Minor stylistic cleanup (narrator tags, cue numbers) applied by Qualora; the underlying text is verbatim from Professor Solnick's lecture.

Lesson arc

1. Module 4 Overview: Elasticity (11 min)

   We divide elasticity into ranges The demand for a good is said to be elastic with respect to price if its price elasticity is more than 1.

   • We divide elasticity into ranges The demand for a good is said to be elastic with respect to price if its price elasticity is more than 1.
   • The demand for a good is inelastic with respect to price if its price elasticity is less than 1.
   • Demand is unit elastic with respect to price if its price elasticity is equal to 1.
2. Video 1: I'm gonna run through an example of how to calculate elasticity and (4 min)

   And so when we calculate elasticity, we have that percent change in quantity, and that is also three 11ths.

   • And so when we calculate elasticity, we have that percent change in quantity, and that is also three 11ths.
   • So that's a really nice quality of elasticity where the same percent change in price, so percent change in quantity in this case, is 24 units different.
   • Minor stylistic cleanup (narrator tags, cue numbers) applied by Qualora; the underlying text is verbatim from Professor Solnick's lecture.
3. Video 2: I'm going to go over the worksheet, actually just the first half in (4 min)

   So the first question we want to find the least elastic to the most elastic and this question is here because people get confused.

   • So the first question we want to find the least elastic to the most elastic and this question is here because people get confused.
   • It'd be really easy to switch, and then the least elastic is frozen desserts because it's the biggest category.
   • Minor stylistic cleanup (narrator tags, cue numbers) applied by Qualora; the underlying text is verbatim from Professor Solnick's lecture.
4. Video 3: here's the second half of the worksheet and the first question here (3 min)

   Lecture Transcript So here's the second half of the worksheet and the first question here is just a definition.

   • Lecture Transcript So here's the second half of the worksheet and the first question here is just a definition.
   • Minor stylistic cleanup (narrator tags, cue numbers) applied by Qualora; the underlying text is verbatim from Professor Solnick's lecture.
   • And then it's an increase in price leads to a decrease in quantity demanded because this is not what a demand curve is.

Key concepts

• Price elasticity of demand
• Elastic demand
• Inelastic demand
• Total revenue test

Practice and assessment

Learners reinforce this module through 17 quiz questions and a supporting glossary covering 4 key terms, with practice centered on We divide elasticity into ranges The demand for a good is said to be elastic with respect to price if its price elasticity is mo….

Concept glossary

Price elasticity of demand

The percentage change in quantity demanded divided by the percentage change in price — a measure of price responsiveness.

Elastic demand

Demand for which the absolute value of the price elasticity is greater than 1.

Inelastic demand

Demand for which the absolute value of the price elasticity is less than 1.

Continue to the full course

Principles of Microeconomics — Part 3: Elasticity & Consumer Demand is the parent course for this module. Use the full course page for pricing, certificate details, and the full curriculum.