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# Elasticity and strange percent changes

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

## Want to join the conversation?

• When do we know which one to use? B->A using the "wrong" way agrees with the "correct" way since the conclusion is the same (inelastic) but A->B is unit elastic (in absolute value)? Also, in studying different points of the demand/supply line and if we are interested in the change from point A to B specifically (if the elasticity changes) do we still use the "right" way?
• Just because the conclusion is the same doesn't mean you got the right numbers. You may run into a question that asks to compare the elasticities of two items, and you may get very different numbers than those that answer the question correctly. I would suggest using the "right" way in any situation besides being directly told to do otherwise (probably by an obstinate college professor). If you are specifically interested in the change from point A to B, I would still use the "right" way. This allows you to compare the number you got with other instances.
• 2/5 divided by 2/3 = 3/5=0.60 precisely ()
• Sal calculated it as .6666 repeating which is not exactly 2/3. This was yes wrong but minutely. With rounding it was fine.
• What if the change in price along with the problem is negative or undifined?
• well if it's negative it doesn't really matter because the end result of elasticity of demand and supply is an absolute value (it's always positive, price changes cannot be undefined in this formula the only way it could be undefined would be to divide by cero and if there is a change in p you can calculate an average (the average cannot be =0)
• @ why not just type 2/5/(-1/1.5) into the TI-85? Then you would see the answer is exactly .6 - there's no rounding.
(1 vote)
• He wants to show people how to be able to do things without a calculator... Of course you can do anything with a calculator. Is'nt that the point of this site--To learn HOW to do it?
• is there maybe a website/link/page that you can practice this or percentage and stuff like that??
• How do you find the percent of change in prices?
• You would: Subtract the new price with the initial price and divide it with the averages of the new and initial prices.
• In , when Sal said approximately 0.6, it is right. But how when it was a nagative number, the expression become exactly 0.6? I don't understand what happend. Thank you very much :D
• At , Sal says 'roughly -66.7%', while the actual answer of -1/1.5 is -66.6666...%. If you divide 40% over -66.6666...%, you would get -0.6.
• How are both ways right? You get different numbers. Even if you end up with the same conclusion. The "correct" way also makes more sense, though I know that doesn't always mean it's used. Or are they both useful, but in different situations?
• It doesn't really matter which method you use, as long as your reader knows which.