A Research Firm Finding Concluded That the Price Elasticity of Demand

question 38

Multiple Choice

A research firm finding concluded that the price elasticity of demand for movie tickets is elastic in the afternoon but inelastic in the evenings.Given this information,to increase overall revenue the theatre owners should

• A)Reduce the ticket prices for the afternoon shows and reduce the ticket prices for the evening shows
• B)Increase the ticket prices for the afternoon shows and reduce the ticket prices for the evening shows
• C)Reduce the ticket prices for the afternoon shows and increase the ticket prices for the evening shows
• D)Increase the ticket prices for the afternoon shows and increase the ticket prices for the evening shows

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Definitions:

Term To Maturity

The time remaining until a debt instrument, such as a bond or loan, is due to be repaid.

Strip Bond

A debt security that has had its periodic interest payments removed, trading only on the principal amount and offering a final payment at maturity.

Par Value

Par value is the nominal or face value of a bond, share, or coupon as stated by the issuer.

Coupon Payments

Regular interest payments made to bondholders over the life of a bond.