Ask Question
BusinessBusiness
15 June, 06:12

A Broadway play company can only charge one price for tickets to a given performance of its play. The company manager notices that they earn greater total revenue when they charge a higher ticket price and its theater is three-quarters full than when they charge a lower ticket price and the theater is completely full. It follows that demand for this play is:a. perfectly elasticb. inelasticc. unit elasticd. elastic

+5
Answers (2)
  1. 15 June, 06:37
    0
    Inelastic.

    Explanation:

    Elasticity of demand for a particular product is a measure of responsiveness of quantity demanded to changes in price of the product. Generally when price increases there is a decrease in the quantity demanded of a product.

    When demand is elastic it gives normal results.

    However when demand is inelastic an increase in price will not lead to a proportional decrease in demand.

    The Broadway play company can increase prices and notice a low reduction in quantity demanded (that is from a full theatre to a three quarter theatre).

    This indicates that the reduction in quantity demand is small relative to price as they make more profit by raising price.
  2. 15 June, 10:00
    0
    b) inelastic

    Explanation:

    Elasticity of demand measures the degree of responsiveness of quantity demand to a change in price. This index indicates what the percentage change in quantity demand would be with a given % change in price.

    Elastic demand

    A product is said to be price elastic if a change in price produces more than a proportional change in quantity. In such case, a reduction in price will increase revenue ... It is a good pricing policy to reduce price if the demand for a product is established to be price elastic.

    Inelastic demand

    An inelastic demand implies that a given change in price will produce less than proportional change in quantity demand. So here, revenue will increase more only with an increase in price. This is so beca]use, cunsumers demand will react less to a given change in price. So the appropriate pricing policy is to increase price if the demand for a product is known to be price inelastic.

    From the explanation above, it can be established that the demand for play performance ticket is price inelastic
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A Broadway play company can only charge one price for tickets to a given performance of its play. The company manager notices that they ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
When your father was born 46 years ago, his grandparents deposited $450 in an account for him. Today, that account is worth $25,000. What was the annual rate of return on this account
Answers (1)
If your income increases by $1,500 and you only consume $900 of it, your marginal propensity to consume would be equal to: a. 0.60. b. 0.75. c. 600.00. d. 0.40. e. 0.50.
Answers (1)
Chick-fil-A's "Eat Mor Chikin" advertising campaign features three cows holding signs that say things like "Save the cows, eat more chicken.
Answers (1)
Iqbal, the only muslim employee at his new firm, has approached the equal employment opportunity commission complaining that his colleagues address him as "the local terrorist.
Answers (1)
Which of the following is true about effective budgets? Question 2 options: It should have a simple format It must be realistic It should be evaluated frequently All of the above are true
Answers (1)
New Questions in Business
You plan to borrow $ 2 comma 000 from a bank. In exchange for $ 2 comma 000 today, you promise to pay $ 2 comma 100 in one year. What does the cash flow timeline look like from your perspective? What does it look like from the bank's perspective?
Answers (1)
Which of the following is indicative of a short-term restrictive financial policy? a) purchasing inventory only as needed b) granting credit to more customers c) increased investment in marketable securities d) maintaining a large accounts
Answers (2)
You are employed as an administrative staff member of a community healthcare office that just opened last month. you and your manager are working hard to advertise and expand the customer base.
Answers (1)
The following costs result from the production and sale of 4,450 drum sets manufactured by Tight Drums Company for the year ended December 31, 2019. The drum sets sell for $295 each. The company has a 30% income tax rate.
Answers (1)
The person who receives financial protection from a life insurance plan is called a what?
Answers (1)
Home » Business » A Broadway play company can only charge one price for tickets to a given performance of its play. The company manager notices that they earn greater total revenue when they charge a higher ticket price and its theater is three-quarters full than
Sign Up Forgot Password?