Question

When the local symphony recently raised the ticket price for its summer concerts, the symphony was surprised to see that its total revenue has actually decreased. The reason for the decline in total revenue was that the demand for tickets was:

Answer 1

Answer:

The demand for ticket was relatively elastic.

Explanation:

An increase in the price will lead to a decrease in the total revenue if the demand is relatively elastic. Relatively elastic demand means that when there is a proportionate change in the price, the quantity demanded changes more than proportionate.  

So when there is an increase in price, the quantity demanded decreases more than proportionate. Since the total revenue is the product of quantity and price, it will decrease.