Essay about Elasticity of Demand for Lottery Tickets
Elasticity is the responsiveness of demand or supply to the changes in prices or income. There are various formulas and guidelines to follow when trying to calculate these responses. For instance, when the percentage of change of the quantity demanded is greater then the percentage change in price, the demand is known to be price elastic. On the other hand, if the percentage change in demand is less than then the percentage change in price; Like that of demand, supply works in a similar way. When the percentage change of quantity supplied is greater than the percentage change in price, supply is know to be elastic. When the percentage change of quantity supplied is less then the …show more content…
The reason for this high rate of rollovers is that the people that are choosing the numbers are choosing them in a non-uniform way. This means that they cover a smaller range of combinations with their numbers. This also helps in explaining why when someone does win there is usually more than one winner (Farrel 2).
The Elasticity of Demand for Lotto Tickets And the Corresponding Welfare Effects
This article did a study using the first 254 weeks of the Florida Lottery. The study shows evidence of the Florida Lottery price elasticity being near unity. This happens when employing a measure of lotto ticket price that is superior to that used by others (Mason 1). From these results it may be, in comparison to other states, that Florida has room to increase the odds to increase the price elasticity of demand to the revenue-maximizing level (Mason 1). Price Elasticity of Demand and an