You own a small town movie theatre. you currently charge $5 per ticket for everyone who comes to your movies. your friend who took an economics course in college tells you that there may be a way to increase your total revenue by increasing the price. is this necessarily a good idea? what is/explain/describe the relationship between revenue and elasticity?

An increase in price will increase revenue only if demand is inelastic.

Explanation:

A person owns a small-town movie theatre.

The price of a ticket for everyone is $5/ticket.  

An increase in price will cause revenue to increase if the demand for tickets is inelastic. An inelastic demand implies that a change in the price of the product would cause a less than proportionate change in the quantity demanded of the product.  

If demand is inelastic an increase in price will cause less than a proportionate decrease in quantity demanded. Overall, total revenue will increase.  

Raja Jailal Singh

Solution(By Examveda Team)

During the Indian Mutiny, from 1857 to 1858, Begum Hazrat Mahal's band of supporters, led by Raja Jailal Singh, rebelled against the forces of the British; later, they seized control of Lucknow and she declared her son, Birjis Qadra, as the ruler (Wali) of Oudh.