Suppose that the demand function for women's basketball tickets is as follows:
Qd = 20,000 - 2,000P
a. Compute the intercept and slope of the demand curve. Graph the demand curve, and give some verbal interpretation.
b. Give a verbal interpretation of this elasticity. Is the elasticity considered "elastic" or "inelastic"? Use the calculus formula to calculate the point elasticity at the price of $4.00.
c. By what percentage will ticket sales change? Would this increase or decrease total revenue? Using the elasticity you just computed, what would happen to attendance if the price were to be reduced by 7%?