A Movie theatre charges $20 for a ticket, with an average daily demand of 600tickets. The theatre is running a loss and is considering changing its price to increaseits revenue.The table below shows the demand schedule estimated by a consultant.Price Quantity of tickets demanded / day196202021600580Show all your calculations (either in the answer box below or in the file you willupload). Round your results to two decimal places.a.Using the midpoint method, calculate the percentage change in priceand the percentage change in quantity if the movie theatre were to increase theprice.b.ased on your answer in part (a) what is the price elasticity of demand?c. (-in order to increase its revenue, and how the elasticity estimate in (b) helps you reachyour conclusion.Explain whether the movie theatre should increase or decrease its price

Elasticity of demand measures the responsiveness of quantity demanded to changes in the price level.

A Movie theatre charges $20 for a ticket, with an average daily demand of 600 tickets. The theatre is running a loss and is considering changing its price to increase its revenue. The table below shows the demand schedule estimated by a consultant. Price Quantity of tickets demanded / day 19 620 20 600 21 580 Show all your calculations (either in the answer box below or in the file you will upload). Round your results to two decimal places. Using the midpoint method, calculate the percentage change in price a. and the percentage change in quantity if the movie theatre were to increase the price. b. ased on your answer in part (a) what is the price elasticity of demand? C. Explain whether the movie theatre should increase or decrease its price in order to increase its revenue, and how the elasticity estimate in (b) helps you reach your conclusion.

A Movie theatre charges $20 for a ticket, with an average daily demand of 600 tickets. The theatre is running a loss and is considering changing its price to increase its revenue. The table below shows the demand schedule estimated by a consultant. Price Quantity of tickets demanded / day 19 620 20 600 21 580 Show all your calculations (either in the answer box below or in the file you will upload). Round your results to two decimal places. Using the midpoint method, calculate the percentage change in price a. and the percentage change in quantity if the movie theatre were to increase the price. b. ased on your answer in part (a) what is the price elasticity of demand? C. Explain whether the movie theatre should increase or decrease its price in order to increase its revenue, and how the elasticity estimate in (b) helps you reach your conclusion.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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