Econ 210 - Assn 2-4

# Econ 210 - Assn 2-4 - c) Given your response in part b.,...

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Econ 210 - Assignment 2-4 a) Recall the ticket price you pay when going to the movie theater. How many movie tickets did you buy last year? All the movies I saw this past year was at a theater where they showed their movies for \$5.00 all day on Tuesdays. Their normal pricing is \$9.50 for night showings. I have seen 12 movies this past year. b) If the movie ticket price goes up by 20%, how will that affect the number of tickets you buy? \$5.00 x 20% = \$6.00 At \$6.00 a show I would still watch movies at that price. \$9.50 x 20% = \$11.40 \$9.50 is too much maybe once a year and \$11.40 is definitely too much.
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Unformatted text preview: c) Given your response in part b., calculate your elasticity of demand. If the price was \$5.00 and increased to \$6.00 I would still see a movie about once a month maybe one less a year, time would the reason for not going. Elasticity of demand would be 0.45 6 - 5 = 20% 12 - 11 = 9% 9% = 0.45 5 11 20% Now at the regular price of \$9.50, price would increase to \$11.40 I would not see any movie in the main theater. Elasticity of demand would be 0.00 11.40 - 9.50 = 20% 1 - 0 = 0% 0% = 0.00 9.50 20%...
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