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Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies?
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Suppse the price of movies seen at theater rise from Rs. 120 per perso...
Price Elasticity of Movies
Price elasticity of demand measures how responsive the quantity demanded of a good is to a change in its price. In this case, we are looking at the price elasticity of movies.
Calculating Price Elasticity
To calculate the price elasticity of movies, we use the formula:
Price Elasticity of Demand = (Percentage Change in Quantity Demanded) / (Percentage Change in Price)
Percentage Change in Quantity Demanded
Initial Quantity = 300 persons
Final Quantity = 200 persons
Percentage Change in Quantity = ((200 - 300) / 300) x 100 = -33.33%
Percentage Change in Price
Initial Price = Rs. 120
Final Price = Rs. 200
Percentage Change in Price = ((200 - 120) / 120) x 100 = 66.67%
Price Elasticity Calculation
Price Elasticity of Demand = (-33.33% / 66.67%) = -0.5
Interpreting Price Elasticity
Since the price elasticity of movies is -0.5, it indicates that movies have an inelastic demand. This means that the percentage change in quantity demanded is less than the percentage change in price. In other words, a 1% increase in price leads to a less than 1% decrease in quantity demanded.
Conclusion
In this scenario, the price increase from Rs. 120 to Rs. 200 led to a decrease in attendance from 300 to 200 persons, resulting in a price elasticity of -0.5 for movies. This information is crucial for theater managers to understand how their pricing strategies affect the demand for movies.
Price elasticity of demand measures how responsive the quantity demanded of a good is to a change in its price. In this case, we are looking at the price elasticity of movies.
Calculating Price Elasticity
To calculate the price elasticity of movies, we use the formula:
Price Elasticity of Demand = (Percentage Change in Quantity Demanded) / (Percentage Change in Price)
Percentage Change in Quantity Demanded
Initial Quantity = 300 persons
Final Quantity = 200 persons
Percentage Change in Quantity = ((200 - 300) / 300) x 100 = -33.33%
Percentage Change in Price
Initial Price = Rs. 120
Final Price = Rs. 200
Percentage Change in Price = ((200 - 120) / 120) x 100 = 66.67%
Price Elasticity Calculation
Price Elasticity of Demand = (-33.33% / 66.67%) = -0.5
Interpreting Price Elasticity
Since the price elasticity of movies is -0.5, it indicates that movies have an inelastic demand. This means that the percentage change in quantity demanded is less than the percentage change in price. In other words, a 1% increase in price leads to a less than 1% decrease in quantity demanded.
Conclusion
In this scenario, the price increase from Rs. 120 to Rs. 200 led to a decrease in attendance from 300 to 200 persons, resulting in a price elasticity of -0.5 for movies. This information is crucial for theater managers to understand how their pricing strategies affect the demand for movies.
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Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies?
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Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies?.
Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suppse the price of movies seen at theater rise from Rs. 120 per person to Rs.200 per person the theater manager observes that the rise in price causes attendance at a given movie to fall from 300 persons to 200 per person. what is the price elasticity for movies?.
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