Question

scenario
you have advised the owner of blonds gym that the best thing to do would be to raise the price of a monthly membership.
the owner wants to know what may happen once this price increase goes into effect.
what will most likely occur after the price of a monthly membership increases? check all that apply
☐ current members will pay more per month
☐ the quantity demanded for memberships will decrease
☐ the number of available memberships will increase
☐ the owner will make more money
☐ bonds gym will receive more membership applications

Explanation:

• Current members will pay more per month: If the monthly membership price increases, current members (who are on that monthly plan) will have to pay the higher price, so this is likely.
• The quantity demanded for memberships will decrease: According to the law of demand, when the price of a good or service (gym membership here) increases, the quantity demanded (number of people wanting to buy the membership) typically decreases, assuming other factors remain constant.
• The number of available memberships will increase: If the price increases and some people drop their memberships (due to the price hike), the number of available memberships (since some slots open up) will increase.
• The owner will make more money: This is not certain. While revenue is price multiplied by quantity demanded (\( \text{Revenue} = \text{Price} \times \text{Quantity Demanded} \)), if the decrease in quantity demanded is large enough, the total revenue (and thus the money the owner makes) could decrease. So we can't be sure this will happen.
• Bond’s Gym will receive more membership applications: An increase in price is likely to deter potential members, so they will likely receive fewer applications, not more.

Answer:

• Current members will pay more per month
• The quantity demanded for memberships will decrease
• The number of available memberships will increase