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In: Economics

British columbia has been singularly succesful at managing the covid - 19 pandemic , and as...

British columbia has been singularly succesful at managing the covid - 19 pandemic , and as a result , there has been gradual reopening of stores , hair saloons , restaurants and movie theatres. Suppose that the newly re opened movie theatres reduce their price of admission from $ 20.00 to $17.00 to get people come back . suppose , as a result of the reduced price in movie theatres , the new drive in movie theatres from question 1 experiences a reduction in the number of cars from their equilibrium of 350 cars to 250 cars a night .  

i ) using the information provided above , determine the cross price elasticity of demand following the " ARC " form as we dont have an equation to work here .

ii). given the sign of your calculation , explain carefully .. 1 ) the type of relationship between the re opened movie theatres and the new drive in movie theatres .. AND 2 ) the interpretation of the elasticity value calculated .

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Expert Solution

Rahul Sunny answered 2 years ago
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