Question

Please give a new response. 300 words or more

1. What is meant by "price elasticity" of demand? Suppose the price elasticity of demand for Newspapers is estimated to be 3. What does this mean in term of responsiveness of demand? Discuss

2. You are on the manager of Bronx Zoo with the responsibility to decrease annual admission fares. You would recommend a decrease in the monthly fares only if you thought the demand curve for the Bronx Zoo visits was:

a. Inelastic

b. Elastic

c. Unitary elastic

d. Perfectly elastic

Discuss. Don't simply give your answer.

Use grading rubrics:

a. Define the term

b. Offer an example

c. Next, explain. Have you answered the questions

d. Try to relate the concept to previous work/assignment(s)

Answer 1

1)

Price elasticity of demand measures the responsiveness of demand to the change in the price level. in other words, it measures the percentage change in quantity demanded to the percentage in change level.

The elasticity of demand greater than 1 suggests that demand is elastic. If the elasticity of demand happens to be less than one, it indicates that demand is inelastic.

the elasticity of demand equal to 3 suggests that demand is highly elastic. Demand would respond disproportionately to change in the price level. Demand is very sensitive to the change in the price level.

2)

Answer: (B)

Demand is elastic implies that now decrease in fare would cause more effect on demand for Zoo.Thus, it would be beneficial.