Answer:
b) inelastic
Explanation:
Elasticity of demand measures the degree of responsiveness of quantity demand to a change in price. This index indicates what the percentage change in quantity demand would be with a given % change in price.
Elastic demand
A product is said to be price elastic if a change in price produces more than a proportional change in quantity. In such case, a reduction in price will increase revenue.. It is a good pricing policy to reduce price if the demand for a product is established to be price elastic.
Inelastic demand
An inelastic demand implies that a given change in price will produce less than proportional change in quantity demand. So here, revenue will increase more only with an increase in price. This is so beca]use, cunsumers demand will react less to a given change in price. So the appropriate pricing policy is to increase price if the demand for a product is known to be price inelastic.
From the explanation above, it can be established that the demand for play performance ticket is price inelastic
Answer:
Inelastic.
Explanation:
Elasticity of demand for a particular product is a measure of responsiveness of quantity demanded to changes in price of the product. Generally when price increases there is a decrease in the quantity demanded of a product.
When demand is elastic it gives normal results.
However when demand is inelastic an increase in price will not lead to a proportional decrease in demand.
The Broadway play company can increase prices and notice a low reduction in quantity demanded (that is from a full theatre to a three quarter theatre).
This indicates that the reduction in quantity demand is small relative to price as they make more profit by raising price.
