The Economics of Sports
6th Edition
ISBN: 9781138052161
Author: Michael A. Leeds, Peter von Allmen, Victor A. Matheson
Publisher: Routledge
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Question
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 price increase if the marginal cost of admitting one more fan is zero.
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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?
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- A 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_forwardThe 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?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
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- 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_forwardAccording 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_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_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