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Wasiq says

Hello Sir,

First of all i am going to comment here for the very first time. I never saw such a outstanding lectures in my life. And most importantly you are providing with these helpful lectures to all students of A.C.C.A . I am very thankful to you. Now i have a question, Dear Sir in your notes, you stated the formula of PRICE ELASTICITY OF DEMAND= % change in demand divided by % of change in price but while calculating B , you took change in price over change in demand. Are they separate things may be i am misunderstood ? and if they aren’t then why there is a change in formula ?

Thanks in advance

John Moffat says

Thank you for your comments

They are two different things. B measures how the price and demand change with each other. Elasticity looks in percentages to measure how big or small the effect of a change on price will be.

Kerri - Ann says

Good Day John,

Hope all is well. Glad to be back with you.

So…

I am doing Example 3 in Chapter 7 (Price Elasticity of Demand) and I am a bit confused.

The PED is = % change in demand / % change in price

Therefore to answer the example my formula should read:

((D2- D1)/D1))*100 ((200-100)/100))*100 = 100

————————– ——————————– ——- = 30.12

((P2- P1)/P1))*100 ((16 – 15.5)/15.5))*100 = 3.32

Am I correct?

John Moffat says

Not quite.

The top bit is correct, but for the demand to increase the price has to fall from 16 to 15.5, and so the bottom of the formula should be (15.5-16)/16.

The answers to all of the examples are at the back of the Lecture Notes (see the contents page)

Kerri - Ann says

Or so the demand increases but the price decreases and so the formula would change to the bottom. Got it.Thanks

Thanana says

Sorry for using this forum, but if possible can you guys change the VIMEO player or uploader to youtube. I have been experiencing a tough time in watching the videos in this player for the past 3 weeks, but when it is the ones uploaded in youtube i don’t have problems. I also viewed the technical help you offer and realized all my players are up to date, and the network has a good strength.

opentuition_team says

Sorry, if you can watch YouTube videos, than Vimeo should all work.

You don’t even mention what browser or device you are using.. Or what country

YouTube js blocked in far more countries than Vimeo, and we won’t change to YouTube im afraid

Thanana says

Thanks for the reply. Am using Adobe Flash player (updated) and also using google crome (updated). Since you are not going to change is there any other option.

opentuition_team says

Try tor browser

fahim231 says

I am totally confused …….during the formula when he arrives at – 1 = 0 -2500b

how on earth did he manage to do 1/2500 ? when they are minus numbers ?

John Moffat says

‘He’ is me!!

If -1 = -2500b

then divide both sides by -2500, and 1/2500 = b

(You should know from school that dividing a negative number by a negative number results in a positive number)

Samoar says

I wish there was a like button

John Moffat says

If we start from 16 and demand of 100, then changing to 15.5 means that demand goes up from 100 to 200 – a percentage change of (200-100)/100 = 100%

Price goes from 16 to 15.5 which is a percentage change if (16 – 15.5)/15 = 3.33%

The formulae you wrote were wrong. It should be P2 – P1 / P1; and D2 – D1 / D1

Sakina says

hello sir, i am a bit confused with example 3 i used the formula

% change in price=(P1-P2)/P2*100

% change in demand=(Q2-Q1)/Q2*100

when i am applying this formula to the question example 3 i am getting the answer as 16 for the first one and 7.25 for the second one. And behind the book its different answers which do not match mine. i am very confused sir please reply

John Moffat says

I am not sure what to answer, because the solution at the back of the notes shows the workings.

You do not say how you managed to arrive at 16 and 7.25.

If you say how your workings were different from the answer then I will try and explain where you have gone wrong.

Sakina says

P1 is 16 P2 15.5 Q1 100 Q2 200

QD%= (200-100)/200*100=50%

PRICE%= (16-15.5)/15.5*100=3.225%

So the formula applies as PED=%QD / %PRICE

50/3.225= 16.