Posted by tania on Sunday, March 10, 2013 at 12:59pm.
1. If average movie attendance is 250 million when prices are $7 a ticket and 200 million when prices are $9 a ticket, the elasticity of demand for movie tickets is about:
A. 0.0.
B. 0.9.
C. 1.1.
D. 1.8.

economics  bobpursley, Sunday, March 10, 2013 at 1:46pm
elasticity demand= dq/Q / dp/P
= ( oldnew)/old / (oldpnewP)/old
= (250200)/250 / (79)/7
= 50*7/250*2=350/500=.7
Somehow, I suspect the write of this question did this:
elasticity=(0ldnew)/NEW /(oldPnewP)/OLD
and got this: 50/200 / 2/9=350/400= .875 or answer B.
check with your instructor on this.

economics  tania, Sunday, March 10, 2013 at 4:46pm
yes
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