If the Detroit Pistons raise their ticket prices and see ticket revenues fall (holding all else equal), is price elasticity of demand elastic or inelastic? Explain.
If the Detroit Pistons raise their ticket prices and see ticket revenues fall (holding all else equal), is price elasticity of demand elastic or inelastic? Explain.
Chapter1: Making Economics Decisions
Section: Chapter Questions
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
Transcribed Image Text:Elasticity
1.
2.
3.
If the Detroit Pistons raise their ticket prices and see ticket revenues fall (holding all else equal), is price
elasticity of demand elastic or inelastic? Explain.
O
At a price of $1000, Company BIG supplies and sells 1000 units. However, when the government imposes a
price ceiling of $800, Company BIG supplies only 700 units but the quantity demanded increases to 1100
units. What is the price elasticity of supply and price elasticity of demand for Company Big products? How
might Company Big distribute its 700 units? Is this an efficient way to allocate BIG products?
Which team do you think faces the most elastic demand, the Grand Rapids Griffins or the Detroit Red
Wings? Which of the determinants of price elasticity of demand support your answer? Which
determinants do not support your answer?
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