Gift loves the theatre; he considers himself as a theatregoer. He feels connected and sees it as
Question:
Gift loves the theatre; he considers himself as a theatregoer. He feels connected and sees it as a natural form of self-expression and creativity. The tables below show the number of tickets Gift will buy, given the various ticket prices and his level of income.
Gift also likes to visit live performances out of town. Table 4 indicates Gift’s price and income elasticities coefficients for demand for fuel over both the long – and short-run.
Source: Haasbroek, J. (2023) |
4.1 Use Table 1 to calculate and interpret Gift’s price elasticity of demand for theatre tickets as the ticket price increases from R100 to R150. Show all formulas and calculations.
(7 Marks)
4.2 Use Table 2 to calculate and interpret Gift's income elasticity of demand for theatre tickets as his income increases from R10 000 to R12 000, if the price of a theatre ticket is set at R100. Show all formulas and calculations.
(7 Marks)
4.3 Do you expect the cross elasticity of demand between theatre tickets and a nice dinner afterwards to be positive or negative? Substantiate your answer by using elasticity concepts.
(3 Marks)
4.4 Analyse the elasticity coefficients provided in Table 3.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill