Question

The demand for tickets to an Ethiopian Camparada film is given by D(p)= 200,000-
10,000p, where p is the price of tickets.If the price of tickets is 12 birr, calculate price elasticity of demand for tickets and draw the demand curve

Answer 1

Ethiopian Camparada film

Explanation:

Given :

D(p)=200,000-10,000 p

Change in demand/change in price = -10,000

At price 12 Birr change demand units will be  

D(p)= 200,000- 10,000 $\times$ 12

= 80,000 units

Elasticity in demand= Change in demand/ Change in price unit

= -10,000

Given :

D(p)=200,000-10,000 p

Change in demand/change in price = -10,000

At price 12 Birr change demand units will be  

D(p)= 200,000- 10,000 $\times$ 12

= 80,000 units

Elasticity in demand= Change in demand/ Change in price unit

= $-10000 \times \dfrac{12}{80000}$

= -1.5(approximately)

Therefore price elasticity of demand is -1.5

Price elasticity is a measure that refers to change in the % of quantity demanded due to % change in price.

As the price elasticity is negative it implies that as the price of the ticket increases demand will keep on falling.

$\dfrac{12}{80000}$

= -1.5(approximately)

Therefore price elasticity of demand is -1.5

Price elasticity is a measure that refers to change in the % of quantity demanded due to % change in price.

As the price elasticity is negative it implies that as the price of the ticket increases demand will keep on falling.