question archive Label the following scenario as example of elastic, inelastic, or unit elastic demand

Label the following scenario as example of elastic, inelastic, or unit elastic demand

Subject:EconomicsPrice:2.88 Bought3

Label the following scenario as example of elastic, inelastic, or unit elastic demand. When Cinema Supreme decreases ticket prices by 19%, total revenue does not change.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

The answer is unit elastic demand, because in the unit elastic demand, any price decrease is matched with a proportional increase in quantity demand, and the resultant effect is no change in total revenues generation. In this case, the price decrease does not affect total revenue and is an example of unit elastic demand.