Question

You are the curator of a museum. the museum is running short of funds, so you decide to increase revenue. when should you raise the admission price in order to increase revenue? never always only when demand is elastic only when demand is inelastic

Answer 1

You would only raise prices if the demand is inelastic. This means, if you raise the prices, it will have little effect on the number of people who purchase tickets, thus raising your revenue.

If demand we elastic and you raised prices, you run the risk of lowering the demand for the museum and ultimately lowering overall revenues.

Never and always are illogical responses to this question.

Answer 2

Only in cases when demand is inelastic would prices be raised. Therefore, increasing ticket prices won't have much of an impact on the amount of individuals who buy them, increasing your revenue.

What is inelastic demand?

In elasticity of demand is the when the change in quantity of commodity is because of change in the price is less, means there is not much affect of the change in the quantity, whether the price is high or low.

Example of inelastic demand is if the price of the medicine is increased then it will not impact the consumption of the customer demand of medicine.

Thus, when demand is inelastic would prices be raised

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