The Economics of Sports
6th Edition
ISBN: 9781138052161
Author: Michael A. Leeds, Peter von Allmen, Victor A. Matheson
Publisher: Routledge
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Chapter 2, Problem 10P
a)
To determine
Explain the
b)
To determine
Explain the elasticity of demand for the bleacher seats at Rays game using the arc method.
c)
To determine
Explain about the idea of
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The figure shows the demand curve for a PlayStation game. The price elasticity of demand when the price increases from $30 to $50 is ________.
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The supply and demand schedules for tickets to basketball games in town of Oakwood are given in the table below.Price Quantity DemandedQuantity Supplied$65,0002,00074,0002,00083,0002,00092,0002,000101,0002,000The stadium owners need to find the optimum price for the games.What are the coefficients of elasticity of supply and demand if the price is raised from $6 to $8? Characterize the demand and supply for tickets based on the calculated elasticies. What is the optimum price that the stadium owners can set for the tickets? Why is the selected price for the tickets better than other prices given in the table above?
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- a. a. Suppose that a small market Major League Baseball team currently charges $12 for a ticket. At this price, they are able to sell 12,000 tickets to each game. If they raise ticket prices to $15, they would sell 11,053 tickets to each game. What is the price elasticity of demand at $12? If the demand curve is linear, what is the algebraic expression for demand?arrow_forwardA minor league baseball team raised the average price of its tickets from $8 to $8.90 and found that average attendance at its games dropped from 5,200 to 4,700. Using the arc elasticity of demand formula, the price elasticity of demand for tickets is (Express your answer as a real number rounded to two decimal places. Don't forget the negative sign.)arrow_forwardSuppose when a hot dog cost $8 the stadium sold 4,000 per game. When hot dogs cost $3 the stadium sells 6,000 per game. Calculate the price elasticity of demand for hot dogs.arrow_forward
- 4.4. If the price of a stadium beer is $6, the Bears would sell 20,000 hotdogs holding other factors fixed. At a price of $5 per beer, however, the Bears would sell 22,000 hotdogs holding other factors fixed. What is the cross-price elasticity of hotdogs with respect to the price of beer? According to your answer, are hotdogs and beer complements or substitutes? How do you know?arrow_forward1. As a transit planner for the city of Miami, you must predict how many people ride the Miami Metrorail and how much money is generated from train fares. According to a recent study, the short-run elasticity of demand for Metrorail is 0.62 and the long- run elasticity is 1.59. The current ridership is 50,000 people per day. Suppose the city commission decides to increase fares by 10%. Predict the changes in train ridership over a one-month period and a five-year period. ANS: b. Over the one-month period, will total revenue increase or decrease? What will happen in the five-year period? ANSarrow_forwarda. Define price elasticity of demand, and cross-price elasticity of demand. b. If the cross-price elasticity of demand between two goods is negative (EXY<0), what can be said about the relationship between these two goods? c. If the Boston Red Sox know that the demand for their tickets is elastic (ED>1), should they increase or decrease the price of their tickets in order to increase total revenue? Explain.arrow_forward
- Define the elasticity of demand and illustrate how it works by giving 2 plausible examples from tourism industry. In addition, briefly answer the following question: Why are elasticities important for strategic decisions even though they are difficult to estimate? Why are elasticities typically not identical for different price and/or income levels?arrow_forwardSome NHL hockey teams have struggled with attendance (even before the Coronavirus outbreak). It has been suggested that if these NHL hockey teams would lower ticket prices, they could increase revenue from ticket sales. This suggestion is based on which of the following assumptions? a. there are no good substitutes for NHL hockey b. demand for NHL hockey is price elastic c. demand for NHL hockey is price inelastic d. demand for NHL hockey is unitary elastic Question: Pick two of the incorrect answers from the above options and explain, in words, why those answers are incorrect.arrow_forwardIf the demand curve for NFL tickets is P = 250 - 0.5Q Find the point of elasticity of demand at P = 235 and Q = 30 Is the demand elastic or inelastic at this point? Why?arrow_forward
- According to the Law of Elasticity, there are elastic and inelastic markets. If we relate this concept to pricing, under what type of market will it be favorable for us to decrease our price? On the other hand, what type of market will favor an increase in price? Explainarrow_forwardProblem 1: Ralph advertises to sell cookies for Php 200 a dozen. He sells 75 dozen and decides that he can charge more. He raises the price to Php 300 a dozen and sells 45 dozen. What is the elasticity of demand? Problem 2: Last week, the price of envelopes was Php 150 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to Php 175 a box, and Julie is now willing to buy 8 boxes. What is Julie's elasticity of demand? Is Julie's demand for envelopes elastic or inelastic? Problem 3: Given the demand schedule, solve for the price elasticity of Mango Demand Schedule for Mango Price (per kilo) Quantity Demanded (per truck) Php 110.00 500 Php 90.00 1200 What is the price elasticity coefficient of Mango? If you are a seller and wants to earn more revenue, what price should you set to maximize your income? Why?arrow_forwarda)Mike owns the Suprise Chocolate store. He charges $4 per kg for his hand made chocolate. You, the economist, have calculated the elasticity of demand for chocolate in her town to be 0.6. If he wants to increase his total revenue, what advice will you give him and why? Be able to explain your answer. b) A firm increases its price from $8 to $10 and sees demand for the product fall by 25%. What would the price elasticityarrow_forward
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Elasticity of Demand- Micro Topic 2.3; Author: Jacob Clifford;https://www.youtube.com/watch?v=HHcblIxiAAk;License: Standard YouTube License, CC-BY