- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 8. Topics in Demand and Supply Analysis
- Subject 2. Elasticities of Demand
CFA Practice Question
As the manager of a ski resort, you want to increase the number of lift tickets sold by 8%. Your staff economist has determined that the price elasticity of demand for lift tickets is 2. To increase sales by the desired amount, you should decrease the price of a lift ticket by ______.
A. 4%
B. 8%
C. 16%
Explanation: Price elasticity of demand = % change in quantity/ % change in price = 8/x = 2. Solve for x.
User Contributed Comments 1
| User | Comment |
|---|---|
| danlan | Sales increased by 8%, but income increase by around 4% (8%-4%) |