You are part of a local community theater group. It is the goal of the group to increase the amount of revenue earned through ticket sales. Mary says the obvious solution is to increase ticket prices. Is Mary correct?
A) Mary is correct if the demand for tickets is price inelastic.
B) Mary is incorrect if the demand for tickets is price inelastic.
C) Mary is correct. The increase in ticket prices will always increase revenue.
D) Mary is incorrect. The increase in ticket prices will never increase revenue.
E) Mary is incorrect. The way to increase revenue is to decrease ticket prices.

Question

Quizplus · Accepted Answer

If the demand for tickets is price inelastic, an increase in ticket prices will lead to a proportionally smaller decrease in quantity demanded, thus increasing total revenue.

You Are Part of a Local Community Theater Group