Asked by Kevin Rodrigues on Jul 08, 2024
Verified
An increase in the price of tickets to a popular sporting event will increase total revenue if
A) there are many substitutes for this form of entertainment.
B) the ticket is considered to be a luxury.
C) the buyers of the tickets are fanatic about the event.
D) the fans are price conscious.
Popular Sporting Event
A sports competition that attracts a large number of fans and viewers, often characterized by high levels of engagement and media coverage.
Total Revenue
The total amount of money a company receives from its sales of goods or services, calculated before any expenses are subtracted.
- Understand the distinctions between elastic and inelastic behaviors in demand and supply.
- Comprehend the impact of elasticity on pricing strategies and revenue generation.
Verified Answer
NH
Niamh HughesJul 10, 2024
Final Answer :
C
Explanation :
The demand for tickets by fanatic fans is likely to be inelastic, meaning their quantity demanded doesn't decrease significantly with an increase in price. Therefore, increasing ticket prices in this scenario would increase total revenue because the decrease in quantity demanded is outweighed by the increase in price per ticket.
Learning Objectives
- Understand the distinctions between elastic and inelastic behaviors in demand and supply.
- Comprehend the impact of elasticity on pricing strategies and revenue generation.
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