Disney just raised its 3 day 3 park pass from $110.00 to $121.00. Sales fell from 4,000 per week to 3,000 per week. 1. Calculate the price elasticity of demand using the arc elasticity of demand formula. 2. Is demand elastic or inelastic? Why? 3. Did Disney management do the right thing? Why? 4. What should they do next? (Hint – look at revenues)

Disney just raised its 3 day 3 park pass from $110.00 to $121.00. Sales fell from 4,000 per week to 3,000 per week. 1. Calculate the price elasticity of demand using the arc elasticity of demand formula. 2. Is demand elastic or inelastic? Why? 3. Did Disney management do the right thing? Why? 4. What should they do next? (Hint – look at revenues)

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 1SCQ: From the data in Table 5.5 about demand for smart phones, calculate the price elasticity of demand...

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