If the university movie theater has decided to increase ticket prices in order to pay for a new movie projector, then we can conclude that
A) the demand for movie viewing at the university is inelastic.
B) tuition and fees will drop.
C) the theater has too many seats to satisfy the demand for movie viewing.
D) the program council chairperson should be fired.
E) the demand for movie viewing at the university is elastic.

Question

Quizplus · Accepted Answer

The decision to increase ticket prices to fund a new projector suggests that the university expects that the higher price will not significantly reduce the number of tickets sold, indicating that the demand for movie viewing is inelastic. Elastic demand would mean a small price increase could lead to a significant drop in quantity demanded, which would not be a viable strategy for raising funds.

If the University Movie Theater Has Decided to Increase Ticket