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 8P
To determine
Explain the
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If 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?
Suppose that Accra Hearts of Oak raise ticket prices from ¢50 to ¢60 per seat and experience a 5 percent decline in tickets sold. What is the elasticity of demand for tickets?
The following table describes the demand for season tickets at Powerhouse University, a perennial football power
Price per ticket per game
Tickets Demanded
$80
105,000
$90
100,000
$100
93,000
$110
85,000
$120
75,000
Currently the stadium seats 75,000 and season tickets are priced at $110. if the university expands the stadium to seat
90,000 and they do not raise ticket prices, by how much will revenue increase per game?
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- Suppose Erin, the owner-manager of a local hotel projects the following demand for her rooms: a. Calculate the price elasticity of demand between 90 and 110. b. Is the price elasticity of demand between 90 and 110 elastic, unit elastic, or inelastic? c. Will Erins total revenue rise if she increases the price from 90 to 110? d. Calculate the price elasticity of demand between 110 and 130. e. Is the price elasticity of demand between 110 and 130 elastic, unit elastic, or inelastic? f. Will Erins total revenue rise if she increases the price from 110 to 130?arrow_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_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
- 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?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_forwardQuestion 20. 20 Refer to the information and assume the stadium capacity is 5,000. The supply of seats for the game Price per Ticket Quantity Demanded $13 1,000 11 2,000 9 3,000 7 4,000 5 5,000 3 6,000 varies inversely with ticket prices. varies directly with ticket prices. is perfectly inelastic. is perfectly elastic.arrow_forward
- The figure shows the demand curve for a PlayStation game. The price elasticity of demand when the price increases from $30 to $50 is ________. 5/3 1.67 1 3/5arrow_forward6. The Mesa Redbirds football team plays in a stadium with a seating capacity of 80,000. However, during the past season, attendance averaged only 50,000. The average ticket price was $30. If price elasticity is 1. What price would the team have to charge in order to fill the stadium? If the price were to be decreased to $27 and the average attendance increased to 60,000, what is the price elasticity? If price elasticity is -4, what price would the team have to charge in order to fill the stadium? If the price were to be decreased to $27 and the average attendance increased to 60,000, what is the price elasticity?arrow_forwardSuppose demand for popcorn at the concession stand increases from 200 boxes per game to 230 boxes per game when the price decreases from $3.00 to $2.50. Using the point price elasticity, what is the price elasticity of demand for popcorn?arrow_forward
- bra graph on the cross-price elasticity of demand between the Nike and New Balance. (no elasticity computation is needed).arrow_forwardStephen Duford says he skipped the game with rival Toronto because of the price increases. "I do not agree that I have to pay extra to see certain teams," he says. "I don't pay less for teams that usually don't draw." What do you know about Mr. Duford's demand (willingness and ability to purchase) for tickets to see the Senators play Toronto?arrow_forwardExercise: Elasticity Read the article ”Super Bowl XLVIII Pricing: A Lesson In Demand Elasticity[1]”, and answer the following questions. Article : https://www.forbes.com/sites/prishe/2013/09/19/super-bowl-xlviii-pricing-a-lesson-in-demand-elasticity/?sh=4023a12b796f Draw two demand curves of tickets for two Super Bowls – XLVIII closed to NYC, and XLVII in New Orleans. Which demand curve is more elastic? (Hint: You don’t need to show the scales on coordinates. One demand curve is steeper than the other one.) 2. What are the reasons that the demand in one market is more elastic to price changes (i.e., flatter demand curve) than the demand in the other market? (Provide at least two reasons) 3.From the article, “In general, teams charge too low a price to maximize ticket revenues.” Why teams should charge a higher price to raise their revenues? Please draw a graph with the demand curve to support this argument. (Hint: mark the areas of revenues before and after the price rise on…arrow_forward
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