Your father owns a tourist site. He currently charges $5 per person who visits the site. Both Ghanaians and foreigners visit the site. The first demand curve is foreigners and the second is for Ghanaians. After your Econs 101 course you have realized that there may be a way to increase total revenue for your father. Using the demand curves below, answer the following questions. What is your father’s current total revenue for the 2 groups? The elasticity of demand is more elastic in which group or market? Which market has the more inelastic demand? 1 mark What is the elasticity of demand between the prices of $5 and $2 in the foreign market? Is this elastic or inelastic? What is the elasticity of demand between $5 and $3 in the Ghanaian market? Is this elastic or inelastic? Given the graphs and what you studied about economics, you recommend to your father to increase the price of foreigners to $8 each and lower the price of a Ghanaians to $3. How much could your father increase total revenue if he takes your advice?
Your father owns a tourist site. He currently charges $5 per person who visits the site. Both Ghanaians and foreigners visit the site. The first
What is your father’s current total revenue for the 2 groups?
The
Which market has the more
What is the elasticity of demand between the prices of $5 and $2 in the foreign market? Is this elastic or inelastic?
What is the elasticity of demand between $5 and $3 in the Ghanaian
market? Is this elastic or inelastic?
Given the graphs and what you studied about economics, you
recommend to your father to increase the
and lower the price of a Ghanaians to $3. How much could your father
increase total revenue if he takes your advice?
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