a-movie-theater-reduces-ticket-prices-from-12-to-10-and-the-number-of-tickets-so

Question

A movie theater reduces ticket prices from $$12 to 10$$, and the number of tickets sold increases from 300 to 400. What is the effect on total revenue, and what does this indicate about demand elasticity?

Accepted Answer

Total revenue increases, indicating elastic demand

Answer

Total revenue remains unchanged, indicating unit elastic demand

Answer

Total revenue decreases, indicating elastic demand

Answer

Total revenue decreases, indicating inelastic demand

A movie theater reduces ticket prices from \$12 to \$10, and the number of tickets sold increases from 300 to 400. What is the effect on total revenue, and what does this indicate about demand elasticity?