worksheet4

# worksheet4 - ECON 1000-100 Worksheet 4 Elasticity 1 You own...

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ECON 1000-100 Worksheet 4 Elasticity 1. You own a small town movie theatre. You currently charge \$5 per ticket for everyone who comes to your movies. Your friend who took an economics course in college tells you that there may be a way to increase your total revenue. Given the demand curves shown, answer the following questions. (Using the midpoint method) a. The elasticity of demand is more elastic in which market? : child b. Which market has the more inelastic demand? : Adult c. What is the elasticity of demand between the prices of \$5 and \$2 in the adult market? Is this elastic or inelastic? : (7/33=0.21), inelastic d. What is the elasticity of demand between \$5 and \$3 in the children’s market? Is this elastic or inelastic? : (4/3=1.33), elastic e. What is your current total revenue for both groups? : Total revenue from children’s tickets is \$100 and from adult tickets is \$250. Total revenue from all sales would be \$350. f. Given the graphs and what your friend knows about economics, he recommends

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## This note was uploaded on 01/31/2010 for the course ECON 1000 at Colorado.

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worksheet4 - ECON 1000-100 Worksheet 4 Elasticity 1 You own...

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