Article Summary
Tickets for the Los Angeles production of the musical 'Hamilton' sold out quickly after going on sale in April. These tickets, sold through the box office at the Pantages Theater and through authorized seller Ticketmaster, were priced as low as $85 for mezzanine seats and $125 for orchestra seats. Once the tickets sold out, the only available seats for the musical which ran from August 11 through December 30, were through ticket resellers such as StubHub and SeatGeek, with tickets selling at an average price of $467 to $510. Ticket prices were the most expensive for August dates, with an average price of $624, and fell for dates in the following months, with December prices averaging $335.
Source: Nicholas Cheng, "Don't have a ticket to 'Hamilton' yet? It's going to cost you," Los Angeles Times, August 19, 2017.
-Refer to the Article Summary.How would the Pantages Theater know if it was operating on the elastic portion of the demand curve for 'Hamilton' tickets?
A)If they increased ticket prices and the total revenue from ticket sales increased.
B)If they increased ticket prices and the total revenue from ticket sales did not change.
C)If they increased ticket prices and the total revenue from ticket sales decreased.
D)If they decreased ticket prices and the total revenue from ticket sales did not change.

Question

Article Summary
Tickets for the Los Angeles production of the musical 'Hamilton' sold out quickly after going on sale in April. These tickets, sold through the box office at the Pantages Theater and through authorized seller Ticketmaster, were priced as low as $85 for mezzanine seats and $125 for orchestra seats. Once the tickets sold out, the only available seats for the musical which ran from August 11 through December 30, were through ticket resellers such as StubHub and SeatGeek, with tickets selling at an average price of $467 to $510. Ticket prices were the most expensive for August dates, with an average price of $624, and fell for dates in the following months, with December prices averaging $335. 
Source: Nicholas Cheng, "Don't have a ticket to 'Hamilton' yet? It's going to cost you," Los Angeles Times, August 19, 2017.
-Refer to the Article Summary.How would the Pantages Theater know if it was operating on the elastic portion of the demand curve for 'Hamilton' tickets?
A)If they increased ticket prices and the total revenue from ticket sales increased.
B)If they increased ticket prices and the total revenue from ticket sales did not change.
C)If they increased ticket prices and the total revenue from ticket sales decreased.
D)If they decreased ticket prices and the total revenue from ticket sales did not change.

Quizplus · Accepted Answer

If the Pantages Theater increased ticket prices and the total revenue from ticket sales decreased, it would indicate that they went beyond the optimal price point and were operating on the inelastic portion of the demand curve. If they decreased ticket prices and the total revenue from ticket sales did not change, it would also indicate that they were operating on the inelastic portion of the demand curve. Therefore, if the Pantages Theater wants to know if it is operating on the elastic portion of the demand curve, they would need to increase ticket prices and observe if the total revenue from ticket sales increased.

Article Summary Tickets for the Los Angeles Production of the Musical 'Hamilton