Question

You are in charge of the local city-owned aquatic center. You need to increase the revenue generated by the aquatic center to meet expenses. The mayor advises you to increase the price of a day pass. The city manager recommends reducing the price of a day pass. You realize that:
a. the mayor thinks demand is elastic, and the city manager thinks demand is inelastic
b. both the mayor and the city manager think that demand is elastic
c. both the mayor and the city manager think that demand is inelastic
d. the mayor thinks demand is inelastic, and the city manager thinks demand is elastic

Answer 1

Answer:

d. the mayor thinks demand is inelastic, and the city manager thinks demand is elastic

Explanation:

And I realized that  the mayor thinks demand is inelastic because, if according to him I will increase the cost of the daily ticket then number of visitor will decrease but my expense will remain same. This is the sign of in-elasticity as the visitors will decrease.  

But according to me what I realized that the city manager thinks demand is elastic because if I will reduce the price then the number of visitors will increase, and in this case also my expenses will remain same. And, this is the sign of elasticity as the visitors will increase in this case.