Suppose that a study of changes in admission prices reveals that when the price of admission to the museum increases by 10%, adults reduce their ticket purchases by 10%, senior citizens reduce their ticket purchases by 20%, college students reduce their ticket purchases by 25%, and children reduce their ticket purchases by 30%. If the cost of having a person visit the museum is the same regardless of whether the person is an adult, senior citizen, college student, or child, which of the following pricing schemes is the most likely to be used by the museum and why? Group of answer choices The museum will set one price of $12 for everyone because that is the most fair. $8 for children, $10 for college students, $12 for senior citizens, and $15 for adults because the museum can earn higher profits by charging the lowest price to those with the least elastic demand and the highest price to those with the most elastic demand. $15 for children, $12 for college students, $10 for senior citizens, and $8 for adults because the adults are most likely to visit and the children are least likely to visit. $8 for children, $10 for college students, $12 for senior citizens, and $15 for adults because the museum can earn higher profits by charging the highest price to those with the least elastic demand and the lowest price to those with the most elastic demand.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

See similar textbooks

Related questions

Question

Suppose that a study of changes in admission prices reveals that when the price of admission
to the museum increases by 10%, adults reduce their ticket purchases by 10%, senior citizens
reduce their ticket purchases by 20%, college students reduce their ticket purchases by 25%,
and children reduce their ticket purchases by 30%. If the cost of having a person visit the
museum is the same regardless of whether the person is an adult, senior citizen, college
student, or child, which of the following pricing schemes is the most likely to be used by the
museum and why?

Group of answer choices

The museum will set one price of $12 for everyone because that is the most fair.

$8 for children, $10 for college students, $12 for senior citizens, and $15 for adults
because the museum can earn higher profits by charging the lowest price to those with the
least elastic demand and the highest price to those with the most elastic demand.

$15 for children, $12 for college students, $10 for senior citizens, and $8 for adults
because the adults are most likely to visit and the children are least likely to visit.

$8 for children, $10 for college students, $12 for senior citizens, and $15 for adults
because the museum can earn higher profits by charging the highest price to those with
the least elastic demand and the lowest price to those with the most elastic demand.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.