CFA Practice Question

There are 539 practice questions for this study session.

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%)
You need to log in first to add your comment.