A Broadway Play Company Can Only Charge One Price for Tickets

question 105

Multiple Choice

A Broadway play company can only charge one price for tickets to a given performance of its play. The company manager notices that the company earns greater total revenue when they charge a higher ticket price and its theater is three-quarters full than when they charge a lower ticket price and the theater is completely full. It follows that demand for this play is

• A)elastic.
• B)unit elastic.
• C)perfectly inelastic.
• D)perfectly elastic.
• E)inelastic.

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Definitions:

Machinery Set-Ups

The process and cost associated with configuring and preparing industrial machinery for a specific production run.

Shortage Cost

Costs incurred when demand exceeds supply, often including lost sales, expedited shipping costs, and decreased customer satisfaction.

Foregone Interest

The potential interest income lost when choosing to invest capital in one option over another.

Idle Workers

Employees who are not engaged in production or work activities due to lack of work, broken machinery, or inefficient job allocation, often leading to wasted resources.