A group of high school students decide to hold a rally during school hours to protest cuts in the state's education budget. they
2 answers:
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Answer:
The answer is below
Explanation:
The graph is attached below.
a) The price elasticity of demand is given by:
price elasticity of demand =
Price of elasticity demand =
Price of elasticity demand =
Since the price of elasticity demand > 1, it is elastic
b) Price of elasticity demand =
Since the price of elasticity demand = 1, it is unitary
c) Price of elasticity demand =
Since the price of elasticity demand < 1, it is inelastic
Answer:
Price elasticity of demand = Change in Quantity/ Change in Price
Using midpoint formula;
Change in Quantity ;
Change in Price;
Price elasticity of demand = -0.342/0.118
= -2.90
Demand is elastic, so decreasing ticket prices will increase revenue.
When the elasticity is larger than 1 it means that a 1% change in price will change demand by more than 1%. In this case, a a decrease of price by 1% will bring 2.9% increase in customers.