You own a small town movie theater. You currently charge $5 per ticket for everyone who...

  

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You own a small town movie theater. You currently charge $5 per ticket for everyone who comes to your movies. Your friend who took an economics course in college tells you that there may be a way to increase your total revenue. Given the demand curves shown, answer the following questions. a. What is your current total revenue for both groups (Adult and children)? b. Which market has a more elastic demand? c. What is the price elasticity of demand between the prices of $5 and $2 in the children's market? d. Given the graphs, your friend recommends that you increase the price of adult tickets to $8 each and lower the price of a child's ticket to $3. If you follow your friend's advice, will it increase or decrease your total revenue? If so, by how much? Why did it increase or decrease? 10 9+ 8 7- 160 n D 10 00 9 + 8 Price C 3+ 6 + 5 4+ 3+ 1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 Quantity Price Child Demand I Adult Demand II + + + 10 20 30 40 50 60 70 80 90 100 Quantity You own a small town movie theater. You currently charge $5 per ticket for everyone who comes to your movies. Your friend who took an economics course in college tells you that there may be a way to increase your total revenue. Given the demand curves shown, answer the following questions. a. What is your current total revenue for both groups (Adult and children)? b. Which market has a more elastic demand? c. What is the price elasticity of demand between the prices of $5 and $2 in the children's market? d. Given the graphs, your friend recommends that you increase the price of adult tickets to $8 each and lower the price of a child's ticket to $3. If you follow your friend's advice, will it increase or decrease your total revenue? If so, by how much? Why did it increase or decrease? 10 9+ 8 7- 160 n D 10 00 9 + 8 Price C 3+ 6 + 5 4+ 3+ 1 5 10 15 20 25 30 35 40 45 50 55 60 65 70 Quantity Price Child Demand I Adult Demand II + + + 10 20 30 40 50 60 70 80 90 100 Quantity