Answer to Question #104102 in Economics of Enterprise for jackie

Question

it has always been free to enter the Botanical Gardens in San Francisco golden gate park. but last year the parks department initiated a 7$ entry fee for non residents. they expected to earn 650,000$ in annual revenue. instead, revenue will actually be no more than 400,000$. so now they are considering lowering the entrance fee. if the goal is to maximize revenue, should the parks department lower the entrance fee or should they engage an advertising agency to promote the park ? explain your choice be sure to include the law of demand and elasticity in your answer

Answer 1

If the goal is to maximize revenue, the parks department should lower the entrance fee if the demand is elastic.