Asked by Breanna Clayton on Jun 01, 2024
Verified
A lower east-side cinema charges $3.00 per ticket for children under 12 years of age and $5.00 per ticket for anyone 12 years of age or older. The firm has estimated that the price elasticity of demand for tickets purchased by those 12 years of age or older is -1.5. Calculate the elasticity of demand for tickets purchased for children under 12 years of age if prices are optimal.
Price Elasticity
A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of demand to price changes.
Optimal Prices
The price point that maximizes a firm's profits or achieves the best balance between sales volume and profit margins.
- Establish the ideal pricing schemes for monopolists with discriminatory pricing tactics in theoretical and practical environments.
Verified Answer
VA
Virginia AguilarJun 01, 2024
Final Answer :
Use equation as shown below. Let P1 = $5.00, P2 = $3.00, and E1 = -1.5 
= 
= -2.25
= = -2.25
Learning Objectives
- Establish the ideal pricing schemes for monopolists with discriminatory pricing tactics in theoretical and practical environments.