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You are in charge of the local city-owned aquatic center. You need to increase the revenue generated by the aquatic center in order to meet expenses. The mayor advises you to decrease the price of a day pass. The city manager recommends increasing the price of a day pass. You realize that The mayor thinks demand is elastic, and the city manager thinks demand is inelastic. Both the mayor and the city manager think that demand is elastic. Both the mayor and the city manager think that demand is inelastic. The mayor thinks demand is inelastic, and the city manager thinks demand is elastic.

Answer :

Answer:

The mayor thinks demand is inelastic, and the city manager thinks demand is elastic.

Explanation:

  • Inelastic demand is when there is no noticeable change in product demand as the price of the product changes drastically. This type of environment is seen when there are no good substitute for the product.
  • Elastic demand is when a slight change in product price changes the market demand for the product.  This occurs when there are substitutes.
  • Here, the mayor thinks there is inelastic demand and the city manager thinks the demand is elastic.

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