The Demand for Tickets to a Rock Concert Is Given

question 48

Multiple Choice

The demand for tickets to a rock concert is given by D(p) = 200,000 - 10,000p, where p is the price of tickets.If the price of tickets is $17, then the price elasticity of demand for tickets is

• A)-2.83.
• B)-11.33.
• C)-17.
• D)-8.50.
• E)-5.67.

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Definitions:

Interest Rate Parity

Interest rate parity is an economic theory that suggests the difference between the interest rates of two countries is equal to the differential between the forward exchange rate and the spot exchange rate of their currencies.

Forward Rate

The predetermined rate at which two parties will exchange currencies on a future date, agreeing upon it in the present.

Spot Rate

The present cost at which a specific asset like a commodity, currency, or security is available for purchase or sale with immediate delivery.

Net Present Value

A financial metric that calculates the value of a project or investment by discounting future cash flows back to their present value to assess profitability and risk.