Transcription
Elasticity's in. In this recording, we're going to talk about how can you apply liquor rhythms; you know, how to easily find out elasticity's of any function. So, elasticity of Y with respect to X, it could be written as dy/y upon dx/x. What is dy/y? Percentage change in Y. What is dx/x? Percentage change in X.
Simplifying this, you can write this as dy/dx into x/y. Well, you know this: that the log of Y it could be written as 1/Y dy. Well, you also know this: the d log of X it could be written as 1/X dx. Okay. Well, if you divide d log of Y by d log of X, what will you get is 1/Y into dy upon 1/X into dx. Well, that is nothing but this is same as what you did here. Okay. That is same as dy/y upon dx/x. Right. So this is basically nothing but dy/y upon dx/x, and this is exactly similar to what you did here, which is dy/y upon dx/x. So whether you write this formula or you use the derivatives like this, you will get the same answer, and it's easy. Okay. Generally, economists, they they convert the function into the natural logs, and then they take the ratio of these two derivatives, which is easier. Okay.