When the Price of a Movie Ticket Increases from $5

question 53

Multiple Choice

When the price of a movie ticket increases from $5 to $7, the quantity of tickets demanded decreases from 600 to 400 a day. What is the price elasticity of demand for movie tickets?

• A) 0.83
• B) 1.20
• C) 1.00
• D) 2.32

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Definitions:

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold in a company, including the cost of the materials and labor directly used to create the product.

Receivables

Debts that customers have towards a firm for items or services that have been received or employed, yet remain unpaid.

Accounts Payable

Money owed by a company to its suppliers or vendors for products or services that have been received but not yet paid for.

Cost of Goods Sold

The direct expenses related to the production of goods sold by a business, including materials and labor costs.