The percentage by which price can be reduce to sell 5000 tickets by using midpoint method.
Explanation of Solution
Given Information:
Price is $10
Current consumption level is 40000
Target level of consumption is 5000
Calculation:
Since, price elasticity is given and percentage change in quantity demanded is computed then percentage change in price will be calculated using following formula:
Therefore, price should be reduced by 22.22% to sell 5000 tickets.
Chapter 46 Solutions
Krugman's Economics For The Ap® Course
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