Hollywood Amusement, a small independent movie theater, decreased the price of admission from $5 to $4. Prior to the price decrease, the business sold 1,000 tickets each month. After the price decrease, it experienced ticket sales of 1,500 a month. If the change in sales is attributable only to the change in price, Hollywood Amusement faces ____ for its movie tickets.
A) inelastic demand
B) constant demand
C) variable demand
D) elastic demand

Question

Quizplus · Accepted Answer

The decrease in price resulted in a significant increase in ticket sales, indicating that the demand for Hollywood Amusement's movie tickets is sensitive to price changes, which is a characteristic of elastic demand.

Hollywood Amusement, a Small Independent Movie Theater, Decreased the Price