manager at Ruby Red Movie Theater decided to change the prices of concession stand items as well as tickets this month in an effort to increase revenues. Below, you are provided with prices for last month and this month as well as the quantities demanded for both months. Use this information when answering questions A–H below. Price
Question 2
The manager at Ruby Red Movie Theater decided to change the prices of concession stand items as well as tickets this month in an effort to increase revenues. Below, you are provided with prices for last month and this month as well as the quantities demanded for both months. Use this information when answering questions A–H below.
|
Price |
Quantity Demanded |
|||||||
|
Item |
Last Month |
This Month |
Last Month |
This Month |
||||
|
Large Drink |
$6.00 |
$5.50 |
150 |
161 |
||||
|
Large Popcorn |
$7.50 |
$8.00 |
125 |
101 |
||||
|
Small Drink |
$2.50 |
$2.00 |
75 |
80 |
||||
|
Small Popcorn |
$5.00 |
$5.25 |
45 |
39 |
||||
|
Candy |
$4.00 |
$3.50 |
57 |
68 |
||||
|
Hot Dog |
$5.00 |
$5.25 |
35 |
36 |
||||
|
Movie Ticket |
$8.00 |
$9.00 |
428 |
300 |
- Calculate the
price elasticity of demand for large popcorn. (Show your work.)
|
|
Is the price elasticity of demand for large popcorn price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below.
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