Can you explain the answer of this question below:

Suppose the price of movies seen at a theatre rises form Rs. 120 per person to Rs.200 per person. The theatre manager observed that the rise in prices has lead to a fall in attendance at a given movie from 300 persons to 200 persons. What is the price elasticity of demand for the movie?

A: 0.5

B: 0.8

C: 1.00

D: 1.2

The answer is b.

Related Test: Test: Theory Of Demand- 1

By
Adarsh Jha
·
Jun 11, 2018 ·CA Foundation

21 Answers

Ria Chauhan
answered
Jul 13, 2018

The correct answer is 0.8 by using arc elasticity method .0.5 is coming by solving question with point method .

Samitha Karnekar
answered
Jun 10, 2018

Arc elasticity : q1-q2 /q1+q2 Ã— p1 +p2 /p1-p2. Where q1 =300 (0rg qty). q2=200(new qty) P1=120 (org price). P2=200 (new price)

Suvi
answered
May 21, 2019

By using arc method answer is 0.8

but in this answer is showing 0.5

if this Q will come in exam so which answer will be correct plz help

but in this answer is showing 0.5

if this Q will come in exam so which answer will be correct plz help

Parth Pachani
answered
Jun 24, 2018

Right answer is 0.8 because 200-300/200+300//200-120+200+120 100-/500//80/320 0.2/0.25 =0.8

Diya Saxena
answered
Jan 30, 2020

Answer is b right ... by formula new demand - old demand Ã· old demand whole divided by new price - old price Ã· old price

Foxy Production
answered
Mar 08, 2019

All our suggestions and the exact answer for this question using arc elasticity method is 0.8( option-B )

Dilip Prajapath
answered
Apr 11, 2020

But sir they asked price elasticity method why we taking arc elasticity method..?

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