The director of a theatre company in a small college town is considering changing the way he prices tickets. He has hired a management consulting firm to estimate the demand for tickets. The firm has classified people who go the theatre into two groups and has come up with two demand functions. The demand curves for the general public (Qgp) and students (Qs) are given below:
Q gp = 500 – 5P
Q s = 200 – 4P
If the current price of tickets is R35 per ticket, calculate the price elasticity of demand for each group. Round off your answers to two decimals.
