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31 October, 12:13

Suppose the absolute value of the price elasticity of demand for basketball game tickets on your campus is greater than 1. Increasing ticket prices will increase the total revenue from ticket sales. True or False.

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  1. 31 October, 12:34
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    The correct answer is: false.

    Explanation:

    The absolute value of price elasticity greater than 1 implies that the demand for basketball game tickets relatively prices elastic.

    In other words, a change in price causes more than proportionate change in the quantity demanded.

    In this situation, if the price for tickets is increased, the quantity demanded will decrease by more than proportionate. This will cause total revenue to decline.

    So the given statement is false.
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