When the local symphony recently raised its price for tickets to their summer concerts in the park, the symphony's total revenue actually decreased. What does this indicate about the elasticity of demand for symphony tickets?
A) It is elastic.
B) It is unit elastic.
C) It is unit inelastic.
D) It is inelastic.

Question

Quizplus · Accepted Answer

When demand is elastic, an increase in price leads to a more than proportional decrease in quantity demanded, resulting in lower total revenue. This is what happened with the symphony tickets.

When the Local Symphony Recently Raised Its Price for Tickets