What would the changes in attendance would you expect

Assignment Help Macroeconomics

Reference no: EM13178999

1. Movie tickets prices increased by 5% and resulted in a 8% drop in sales. What is the price elasticity of demand?

2. If ticket prices decreased by 5% instead of raising them, what would the changes in attendance would you expect?

3. If a competing cinema reduced its prices by 10%, how would that affect demand at your cinema?

Using the formula E=%Chg in Q / %Chg in P

I think the first answer is E= -8/5 = -1.6 and the second answer is -1.6=Chg in Q / -5 which makes Q=8. Please correct me if I am wrong. The 3rd question has me stuck, do I base the demand at my cinema off the -1.6?

Reference no: EM13178999

Questions Cloud

Find the largest possible volume of the box : If 1600 square centimeters of material is available to make a box with a square base and an open top, find the largest possible volume of the box.

What is the predicted production of an 18 foot tree : The yearly production of a 5 foot orange tree is 36 pounds of oranges. A 14 foot tree produces 72 pounds. What is the predicted production of an 18 foot tree?

Is there an externality : Is there an externality? If so, describe it, including references to whether it is positive or negative, and whether it is a consumption or production externality. If there is an externality, does it seem likely that private markets will arise tha..

What assumptions is the financial reporting model : What assumptions is the financial reporting model based on, what principles support the financial reporting model and who oversees the accounting profession?

What would the changes in attendance would you expect : Movie tickets prices increased by 5% and resulted in a 8% drop in sales. What is the price elasticity of demand? 2. If ticket prices decreased by 5% instead of raising them, what would the changes in attendance would you expect? 3. If a competing cin..

Understand the importance of cash management : Identify items of cash (and cash equivalents), understand the importance of cash management, and discuss revenue recognition when the right of return exists

Identify some budgeting issues including format : Identify some budgeting issues including format, and budget monitoring and What must happen in order for the company to succeed?

At what time does the stone hit the ground : At what time does the stone hit the ground? C. What is the velocity of the stone when it hits the ground?

What are the risks and opportunities of the strategies : What are the risks and opportunities of the strategies followed by Pepsi? of Coca Cola? 3.) How would you respond to Coca-Cola's change in sales policy? How would you ensure Pepsi's board that this response will allow you to remain competitive and..

User Account

All Pages