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Question: Suppose you are the manager of the only theatre in town that plays Shakespeare. You found that the quantity demanded for your tickets decreases from 160 to 150 when the ticket price increases from $44 to $49.
(a) What is the price elasticity of demand for your tickets? Show your calculation, using the midpoint method.
(b) Explain the meaning of the elasticity calculated in (a) above.
(c) Why do you think your tickets have the elasticity calculated in (a)?
(d) Would the elasticity calculated in (a) above apply to everyone in town? Why or why not?
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