Question

At a local theatre, the general public pays of $Rs.50$ for a movie ticket while college students receive $Rs.10$ discount when they show their college ID card. What does this practice say about the theatre's perception of price elasticity of demand?

• A. College students's price elasticity of demand is $80$% of that of the general public.
• B. College student's price elasticity of demand is $20$% of that of the general public.
• C. College student's demand for movie tickets is less price elastic than that of the general public.
• D. College student's demand for movie tickets is more price elastic than that of the general public.

Answer 1

Answer: (D)

College student's demand for movie tickets is more price elastic than that of the general public.

The theatre's perception of price elasticity of demand is that the college student's demand for movie tickets is more price elastic than that of the general public.