What must be true about the price elasticity of demand

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You are the new appointed nationwide manager of Cee Lo Green theateres. At present the theateres charges the same admission price of $8 to all customers, regardless of age. After completing ECO 6311, you propose a two-tier pricing scheme: $5 for children under the age of 12 and $10 for adults. You tell your CEO that your proposal is likely to increase revenues. What must be true about the price elasticity of demand if your proposal is to achieve its goal of raising revenue? Explain your answer.

Reference no: EM13147296

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