Question

In​ 2015, the Rock and Roll Hall of Fame and Museum charged adults​ $25.85 for admission. Seniors​ (65 years and​ older) and military personnel were charged​ $20.50, and children between 9 and 12 years old were charged​ $16.25.

Using the admission fees as a guide, rank these groups based on their elasticities of demand from most to least elastic.

Answer 1

Step-by-step explanation:

Price elasticity of demand is a measure of the sensitivity of demand for a good or service to changes in the price of that product. We say that the price elasticity of demand is elastic when a percentage change in the price of this good has major impacts on demand. On the contrary, we say that the price elasticity of demand is inelastic when variations in the price of goods have little or no influence on demand.

Thus, f firms tend to charge a lower price from the group whose demand is most price elastic (sensitive). In this case, children ages 9 to 12 who pay $ 16.25 for the ticket. The second group, whose demand is less elastic than the group of children, but more elastic than ordinary tickets is the elderly and military group, whose price is $ 20.5. Finally, the group whose demand is least price elastic is the group of ordinary adults who are willing to pay a higher price ($ 25.8).