Answer to Question #95122 in Microeconomics for kierra jackson

Question

Jumping Joe’s Night Club has found that when they offer half price admission to the club on Wednesday nights (when business is typically slow), their total revenue rises. (a) Is their demand elastic? Explain. (b) Is it a good idea for them to continue with this promotion? Why?

Answer 1

Their demand is elastic because, elastic demand occurs when a change in price or other factors lead to in the quantity of goods and services purchased by consumers. The consumers responded to a change in price at the club, an indication of demand elasticity. It's a good idea to continue with the promotion since the availability of substitutes may affect the quantity demanded if the club stops the promotion.