Business, 26.02.2020 04:53 ArielA13

You are the curator of a museum. The museum is running short of funds, so you decide to increase revenue. What should you do to increase revenue if the price elasticity of demand is 0.98?

a. Raise the admission price
b. Lower the admission price
c. Nothing, revenue is maximized at current admission price

Answers: 1

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Answers

The answer to what you should do to increase revenue if the price elasticity is 0.98 is option B) Lower the Admission price

Explanation:

The price elasticity of demand is a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price. This is a term used when discussing price sensitivity. The formula for calculating price elasticity of demand is:

Price Elasticity of Demand = % change in Quantity Demanded / % Change in Price

If a small change in price is accompanied by a large change in quantity demanded, the product is said to be elastic (or responsive to price changes). On the other hand, a product is deemed inelastic if a large change in price is accompanied by a small amount of change in quantity demanded.

At 0.98, the price elasticity is very close to !.0 which is Unit elastic.

However, since it is very close to unit elastic: an economic theory that assumes a change in price will cause an equal proportional change in quantity demanded. Here, demand or supply is perfectly responsive to price changes by the same percentage.

It is not advisable to raise the price of admission to increase revenue. Rather, the aim should be to reach Unit Elastic by reducing the admission rate through a promotional offer that will sustain existing clients and attract additional customers thereby generating more revenue.

Answer from: Quest

answer; common market;

Answer from: Quest

$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

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You are the curator of a museum. The museum is running short of funds, so you decide to increase rev...