If Major League Baseball ticket prices rise by 15 percent, the number of tickets sold falls by 5 percent. The elasticity of demand is:

Question

Quizplus · Accepted Answer

The elasticity of demand can be calculated using the formula:
Elasticity of demand = percentage change in quantity demanded / percentage change in price
Given that ticket prices rise by 15% and the number of tickets sold falls by 5%, we can calculate the percentage changes as follows:
Percentage change in quantity demanded = -5% / 100% = -0.05
Percentage change in price = 15% / 100% = 0.15
Substituting these values in the formula, we get:
Elasticity of demand = -0.05 / 0.15 = -1/3
Therefore, the answer is B.

If Major League Baseball Ticket Prices Rise by 15 Percent