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3. Over the last year, the average ticket price to a Washington Wizards game increased from...

3. Over the last year, the average ticket price to a Washington Wizards game increased from $56 to $61, while the average attendance fell from 17,800 to 16,400. Based on this information, is demand for tickets to Wizards games elastic, inelastic or neither?

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Answer #1

Ans) Elasticity of demand is the responsiveness of quantity demanded to change in price. If elasticity is more than 1, good is elastic in nature. If elasticity is less than 1, good is inelastic in nature. If elasticity is 1, good is unit elastic.

Elasticity of demand carries a negative sign. And generally we take its absolute value i.e ignore negative sign.

Elasticity of demand = %change in quantity demanded ÷ %change in price

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