Therefore . . .

A given % rise in P will be more than offset by a larger % fall in Q

so that total revenue (P × Q) falls.

A given % rise in P will be exactly offset by an equal % fall in Q

so that total revenue (P × Q) is unchanged.

A given % rise in P will cause a smaller % fall in Q so that total

revenue (P × Q) rises.

TABLE 5.3 Will the Band Earn More Revenue by Changing Ticket Prices?

What if the band keeps cutting price, because demand is elastic, until it reaches a level where it sells all 15,000

seats in the available arena? If demand remains elastic at that quantity, the band might try to move to a bigger

arena, so that it could slash ticket prices further and see a larger percentage increase in the quantity of tickets

sold. However, if the 15,000-seat arena is all that is available or if a larger arena would add substantially to

costs, then this option may not work.
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