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 9P
To determine
Explain the effect of
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Stephen 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?
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?
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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- Question 20.span>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_forwardA baseball team plays in a stadium that holds 72000 spectators. With the ticket price at $8 the average attendance has been 29000. When the price dropped to $6, the average attendance rose to 36000. Assume that attendance is linearly related to ticket price. What ticket price would maximize revenue? $ Submit Questionarrow_forwardA baseball team plays in a stadium that holds 58000 spectators. With the ticket price at $11 the average attendance has been 26000. When the price dropped to $10, the average attendance rose to 29000. Assume that attendance is linearly related to ticket price. What ticket price would maximize revenue? $arrow_forward
- Is there an economic justification to pay the baseball player Alex Rodriguez $25 million a year? The quarterback Peyton Manning makes $14 million per year. Has this market gotten completely out of hand? Can there be any justification to some of the salaries paid? If so, what are the justifications? What impact do these salaries have on the sport? Are there good economic reasons for teams to pay these salaries?arrow_forward3.2. The stadium of the MANU has 30 seats. The demand curve for tickets has a price intercept of $36 and a quantity intercept of 72.3.2.1. Draw the supply and demand curves to scale (in Excel and copy it to your word answer-This demand curve has the form P = 36−0.5×Q.) 3.2.2. Determine the equilibrium admission price, and the amount of revenue generated from ticket sales for eachgame. 3.2.3. A local alumnus and benefactor offer to install 6 more seats at no cost to the University. Compute the price that would be charged with this new supply and compute the revenue that would accrue at this new equilibrium price. Should the MANU accept the offer to install the seats?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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