- CFA Exams
- CFA Level I Exam
- Study Session 4. Economics (1)
- Reading 12. Topics in Demand and Supply Analysis
- Subject 2. Elasticities of Demand

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**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.

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**User Contributed Comments**
1

User |
Comment |
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danlan |
Sales increased by 8%, but income increase by around 4% (8%-4%) |