The municipal swimming pool charges lower entrance fees to local residents than to nonresidents.Assuming that this pricing strategy increases the profits of the pool,we can conclude that nonresidents must have a _____ demand for swimming at the pool than do residents.

Question

Quizplus · Accepted Answer

Nonresidents are charged higher entrance fees, yet this strategy increases profits, indicating they continue to use the pool despite higher prices. This behavior suggests nonresidents have a less elastic demand, meaning their demand changes less in response to price changes compared to residents.

The Municipal Swimming Pool Charges Lower Entrance Fees to Local