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Suppose the Chicago Bears football team raises ticket prices by 13 percent and as a result the quantity of tickets demanded decreases by 21 percent. This response means that the demand for Bears tickets is:______.
a. unit elastic.
b. elastic.
c. inelastic.
d. perfectly inelastic.
e. perfectly elastic.

Respuesta :

jepessoa

Answer:

B) elastic.

Explanation:

price elasticity of demand (PED) = % change in quantity / % change in price

PED = 21% / 13% = 1.62

when

  • PED = 1, demand is price unitary
  • PED < 1, demand is inelastic
  • PED > 1, demand is elastic ⇒ a change in price, will cause a proportionally larger change in the quantity demanded

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