The Price of Movie Tickets Increases by 10% and the Demand

question 38

Multiple Choice

The price of movie tickets increases by 10% and the demand for movie tickets falls by 12.5%. The price elasticity of demand for movie tickets is:

• A) perfectly inelastic
• B) elastic
• C) inelastic
• D) perfectly elastic

---

Definitions:

Fixed Costs

Costs that remain constant regardless of how much is produced or sold, including expenses like rent, salaries, and insurance.

Relevant Range

The span of activity or volume where the specific assumptions of cost behavior are considered valid.

Break-even Point

The level of production or sales at which total revenues equal total costs, resulting in neither profit nor loss.

Second Marriage

A second marriage refers to the act of getting married again after a previous marriage has ended, either through divorce or the death of a spouse.