Economics 0455 · IGCSE · Price elasticity of demand (PED)

Price elasticity of demand (PED) — practice question

A cinema contains 500 seats. Its admission price was increased from $\$2$ to $\$5$, and its daily revenue rose from $\$800$ to $\$1500$. What conclusion may be drawn from this information?

  • APrice elasticity of demand for cinema seats was elastic.
  • BPrice elasticity of supply of cinema seats was elastic.
  • CThe cinema operated below full capacity.
  • DThe cinema’s profits rose by $\$700$.

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