Question

A baseball team plays in a stadium that holds 68,000 spectators.

With the ticket price at $11, the average attendance has been 29,000.
When the price dropped to $10, the average attendance rose to 34,000.

Answer 1

The demand for tickets is elastic, meaning a decrease in price leads to a proportionally larger increase in quantity demanded.

Step-by-step explanation:

To determine the demand elasticity of ticket prices, we can use the formula:

Elasticity = (Percentage change in quantity demanded) / (Percentage change in price)

First, let's calculate the percentage change in quantity demanded: (34,000 - 29,000) / 29,000 = 0.1724

Next, let's calculate the percentage change in price: ($10 - $11) / $11 = -0.0909

Now, we can calculate the demand elasticity: 0.1724 / -0.0909 = -1.89

Since the demand elasticity is less than 1, we can conclude that the demand for tickets is elastic. This means that a decrease in price leads to a proportionally larger increase in quantity demanded.