Answer to Question #114014 in Microeconomics for t h

Question #114014
Suppose a movie theater determines it can charge different prices to patrons who go to weekday matinees and people who attend evening and weekend shows . The movie theater’s goal is to increase total revenue.

The price elasticity of demand for weekend and evening patrons is -0.40, and the price elasticity of demand for matinee moviegoers is -2.50.

Based on the price elasticity of demand for each group of people, how should the movie theater adjust its prices?
1
Expert's answer
2020-05-07T08:36:39-0400

As the price elasticity of demand for weekend and evening patrons is -0.40, then the demand is inelastic, and a movie theater should increase price for them to increase total revenue. As the price elasticity of demand for matinee moviegoers is -2.50, then the demand is elastic, and a movie theater should decrease price for them to increase total revenue.   


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS