If a university decreases the price of tickets to football games to collect more revenue,it is assuming that the demand for tickets is:
A)unstable.
B)price-inelastic.
C)price-elastic.
D)price unit-elastic.

Question

Quizplus · Accepted Answer

If the university believes that by lowering the price of tickets they will collect more revenue, then they are assuming that the demand for tickets is price-elastic. This means that as the price decreases, the quantity demanded will increase enough to offset the lower price, resulting in more revenue. If the demand for tickets were price-inelastic, decreasing the price would not result in a significant increase in quantity demanded and may actually result in decreased revenue. If the demand were unstable or price unit-elastic, it would not necessarily support the decision to lower ticket prices.

If a University Decreases the Price of Tickets to Football