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A Broadway play company can only charge one price for tickets to a given performance of...

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 elastic

b. inelastic

c. unit elastic

d. elastic

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Answer #1

The demand for this play is inelastic (option b is correct)

A higher total revenue for a higher ticket price means (change in quantity is less than proportional to change in price)

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