Suppose the University of Oklahoma Increases the Price of Student

question 42

Multiple Choice

Suppose the University of Oklahoma increases the price of student football tickets for the 2012 season by 30 percent.If the price elasticity of demand for student tickets is 1.22,the price increase leads to

• A) a 36.6 percent decrease in the quantity demanded.
• B) a 30 percent decrease in the quantity demanded.
• C) a 1.22 percent decrease in the quantity demanded.
• D) 28.78 percent decrease in the quantity demanded.
• E) no change in the quantity demanded.

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Definitions:

Temporary Investments

Short-term investments made by a company in securities that can be easily converted into cash, typically held for a year or less.

Market Price

The current market price for acquiring or disposing of an asset or service.

Interest Revenue

Income earned from investments, loans, or other financial instruments that pay interest, contributing to a company's total revenue.

Dividends

Payments made out of a company's earnings to its shareholders, based on the number of shares held.