-Figure 5-7 shows Sally's demand for movie theater tickets (quantity of movies per year).At a price of $9 per ticket,her
A)demand is inelastic
B)demand is perfectly elastic
C)demand is elastic
D)total expenditure is being maximized
E)demand is perfectly inelastic

Question

-Figure 5-7 shows Sally's demand for movie theater tickets (quantity of movies per year).At a price of $9 per ticket,her
A)demand is inelastic 
B)demand is perfectly elastic 
C)demand is elastic 
D)total expenditure is being maximized 
E)demand is perfectly inelastic

Quizplus · Accepted Answer

Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price. In this case, the price of a ticket increases from $8 to $9, and the quantity demanded decreases from 10 to 8. The percentage change in price is (9-8)/8 = 12.5%, and the percentage change in quantity demanded is (8-10)/10 = -20%. Since the percentage change in quantity demanded is greater than the percentage change in price, demand is elastic.

-Figure 5-7 Shows Sally's Demand for Movie Theater Tickets (Quantity