You manage the only movie theater in town. You have noticed that seniors are more sensitive...

Transcribed Image Text:

You manage the only movie theater in town. You have noticed that seniors are more sensitive to price changes for movie tickets than the rest of the movie goers. Specifically, you have found the seniors have an own price elasticity of demand of -1.85 for admission and the rest of the population has an own price elasticity of -1.2. Your best guess is that each additional ticket sold adds $2.00 to your costs or operations. How can you use this information to your advantage? You manage the only movie theater in town. You have noticed that seniors are more sensitive to price changes for movie tickets than the rest of the movie goers. Specifically, you have found the seniors have an own price elasticity of demand of -1.85 for admission and the rest of the population has an own price elasticity of -1.2. Your best guess is that each additional ticket sold adds $2.00 to your costs or operations. How can you use this information to your advantage?

Answer rating: 100% (QA)

Leveraging Price Elasticity for Maximum Revenue Here are some ways you can use the information about price elasticity to your advantage 1 Implement Se... View the full answer