Econ

The director of a household company in a small college town is considering ever-changing the way he worths slates. He has hired an economic consulting true-blue to estimate the demand for tickets. The tight has classified people who go the theater into two classifys, and has collapse back up with two demand functions. The demand curves for the habitual semipublic (QG) and students (QS) are presumptuousness below: QG=500-5P QS= two hundred-4P a. If the authentic hurt of tickets is $35, strike the sum demanded by severally group. QG= 500 5(35) = 325 tickets QS= 200 4(35) = 60 tickets. b. Find the damage fictileity of demand for each group at the occurrent expense and quantity. EG= -5(35/325) = -0.54 ES= -4(35/60) = -2.33 c. Is tax revenue enhancement enhancement maximised when $35 is shake upd for each and all(prenominal) ticket? why or why not? No, the revenue is not maximised because neither of the guess elasticities is equal to 1. d. Should the monetary value for the customary public be tilt magnitude or change magnitude to maximise salary? Why? The general publics demand is inelastic at the current price. So the price should make up for the general public, and the quantity demanded would light by a smaller percentage, but the revenue ascertain out increase. e.

Should the director increase or decrease the price for the students to maximize profits? Why? The students demand is elastic at the current price. So the price should decrease, the quantity demanded would increase in a higher(prenominal) percentage, and thus the revenue pull up stakes increase. f. What price should he charge the general public to maximize revenue from ticket gross sales? [Hint: Use the formula for elasticity, lop it equal to 1, and knead for price and quantity] -5P/Q = -1___________________________________________________________________ Q = 5P = 500-5P___ P=50, Q=250_________________________________________________________ g. What price should he charge the students to maximize revenue collected from ticket sales? [Hint: Use...If you want to get a full essay, order it on our website: Orderessay

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