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 4DQ
To determine
Explain the law of diminishing marginal return in the limiting team size of team roster in basketball.
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Explain why it would cost Rafael Nadal or Venus Williams more to leave the professional tennis tour and open a tennis shop than it would for the coach of a university tennis team to do so.
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The demand for NHL players can be written as: Qd=300-W , where Qd - number of players demanded by the league, W - wage of the player (you can think about it as of price). Marginal revenue: MR=300-2Q The supply of players: Qs=W, where Qs - number of players willing to play. ME=2Q .
a) Imagine that both sides of the market are perfectly competitive. What is the equilibrium number of players in the league and what is the equilibrium wage? Show it on a graph.
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