Answer to Question #167839 in Microeconomics for Bubblys

Question

In an episode of the TV show The Simpsons, the Simpsons find that their pet elephant Stampy is eating them out of house and home. So they decide to charge admission to people to come see the elephant. They begin with a price of $1, and 58 people come to see the elephant. But that doesn’t raise enough money to feed the elephant. So they raise the price. Will a higher price of admission increase the revenue the family receives? Explain why or why not.

Answer 1

The higher price of admission will not increase the revenue the familiy receives because increase in price decreases the demand to see the elephant.