Question

I would like to ask about the price and quantity demanded question here.

Suppose that the current equilibrium for S-League football matches is $100 and 10,000 tickets. If demand for S-League tickets are price elastic and the price of each ticket increases to $150,

(i) What is the minimum fall in quantity demanded that the organiser can expect?

(ii) Explain the effect on total revenue.

Thank you so much for your help.

Answer 1

a. Since demand is price elastic, a great fall of demand of up to 5000 tickets is expected due to increase in price from $100 to $150.

b.Revenue is expected to fall