10%, the quantity demanded will decrease by 22.7%. A 10% increase in the price of housing will cause only a

slight decrease of 1.2% in the quantity of housing demanded.

LINK IT UP

Read this article (http://openstax.org/l/Movietickets) for an example of price elasticity that may have affected

you.

Does Raising Price Bring in More Revenue?

Imagine that a band on tour is playing in an indoor arena with 15,000 seats. To keep this example simple,

assume that the band keeps all the money from ticket sales. Assume further that the band pays the costs for its

appearance, but that these costs, like travel, and setting up the stage, are the same regardless of how many

people are in the audience. Finally, assume that all the tickets have the same price. (The same insights apply if

ticket prices are more expensive for some seats than for others, but the calculations become more

complicated.) The band knows that it faces a downward-sloping demand curve; that is, if the band raises the
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