Question

You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. Should you increase or decrease the price of admission?

Answer 1

If demand is elastic an increase or decrease in price of admission will decrease or increase the number of admission respectively and in turn can change the revenue of the museum and that change will depend on the elasticity. If the demand is inelastic an increase in price will lead to an increase in the revenue of the museum.