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:

Marginal Costs

The upsurge in full cost that comes from the generation of one additional unit of a good or service.

Short Run

A period in economic analysis where at least one input is fixed, focusing on immediate effects and adjustments in production or operations.

Marginal Revenue

The increased revenue a company achieves from the sale of an additional good or service unit.

Purely Competitive

This describes a market structure where many firms sell identical products, and no single seller can influence the market price.