If the managers of a theater plan to raise ticket prices to increase ticket revenues, then they must believe that demand is
A)elastic
B)inelastic
C)unit elastic
D)perfectly elastic
E)income elastic

Question

Quizplus · Accepted Answer

If the managers believe that raising ticket prices will increase ticket revenues, they must believe that the demand for tickets is inelastic. This means that even if the price of tickets increases, people will still be willing to pay for them. If the demand were elastic, then increasing ticket prices would lead to a decrease in ticket sales and lower revenues. Unit or perfect elasticity implies that any increase in price would cause a proportional decrease in demand, leading to no change in revenue. Income elasticity is not relevant to this question.

If the Managers of a Theater Plan to Raise Ticket