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 DemandedItem Last Month This Month Last Month This MonthLarge Drink$6.00 $5.50 150 161Large Popcorn$7.50 $8.00 125 101Small Drink$2.50 $2.00 75 80Small Popcorn$5.00 $5.25 45 39Candy $4.00 $3.50 57 68Hot Dog $5.00 $5.25 35 36Movie Ticket$8.00 $9.00 428 300 Calculate the price elasticity of demand for large drinks. (Show your work.)Is the price elasticity of demand for large drinks price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below.

Price elasticity of demand measures the change in quantity demanded due to change in price of…

Answered: The manager at Ruby Red Movie Theater…

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...

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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 drinks. (Show your work.)
Is the price elasticity of demand for large drinks price elastic, inelastic, or unit (unitary)? Briefly explain why in the box below.

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