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 4, Problem 4P
(a)
To determine
Illustrate the number of tickets that would be able to sell.
(b)
To determine
Determine the number of tickets and price.
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Q4: How prices reaches equilibrium? Give an example.
Economics
.] A local monopoly, Bernie’s Lemon Fizz, sells its Lemon Fizz to the general public in its storefront and at a local sports arena. The demand function for its own store is
Pg = 10 - 0.1qG
and demand for the sports arena is
Ps= 20 - 0.05 qS
The total cost of supplying Lemon Fizz to each market is
TC(Q) = Q + 150
where Q = qG + qS What is the optimal price Bernie will sell his Lemon Fizz for in each market? What are Bernie’s profit in each market? Why the price discrepancy? Is it realistic for Bernie to be able to price discriminate in these two markets? Explain.
The demand for seats per game, at a local stadium that seats a maximum of 40 million per game, is P = 22 – 0.2Q where P is the price of a ticket and Q represents the number of seats (expressed in millions). Assume that all seats and all games are the same, and marginal cost = $10 = average cost. Calculate the maximum profit per game if the local stadium is owned by a monopolist charging the same price for each seat.
Chapter 4 Solutions
The Economics of Sports
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