1. Individual Problems 6-1 George has been selling 8,000 T-shirts per month for $9.50. When he increased the price to $10.50, he sold only 5,000 T-shirts. Which of the following best approximates the...

1. Individual Problems 6-1 George has been selling 8,000 T-shirts per month for $9.50. When he increased the price to $10.50, he sold only 5,000 T-shirts. Which of the following best approximates the price elasticity of demand? a. -4.1538 b. -3.6923 c. -4.6154 d. -5.0769 Suppose George's marginal cost is $4 per shirt. Before the price change, George's initial price markup over marginal cost was approximately (a. 0.5789, b. 0.5211, c. 0.2895, d. 0.6368) . George's desired markup is (a. 0.2383, b. 0.195, c. 0.13, d. 0. 2167). Since George's initial markup, or actual margin, was (GREATER/ LESS) than his desired margin, raising the price was (NOT PROFITABLE/ PROFITABLE) . 2. Individual Problems 6-2 To conduct an experiment, a movie theater increased movie ticket prices from $9 to $10 and measured the change in ticket sales. The theater then gathered data over the following month to determine whether the price increase was profitable. Assume total costs to the theater are the same, whether the price of a ticket is $9 or $10. In order for the ticket price to have been profitable over the month, the elasticity of demand for movie tickets must be (INELASTIC OR ELASTIC) . Demand curves become (MORE OR LESS) elastic in the long run. This means that the ticket price increase will likely be (MORE OR LESS) profitable in the long run.