The impact of $5 tax on the ticket for match.

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Chapter 6, Problem 9PA

To determine

The impact of $5 tax on the ticket for match.

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At Fenway Park, home of the Boston Red Sox, seating is limited at 39,000, Hence, the number of tickets issued is fixed at that figure (supply of tickets). Seeing a golden opportunity to raise revenue, the City of Boston levies a per ticket tax of $5 to be paid by each ticket buyer. Boston sports fans, a famously civic-minded lot, dutifully send in the $5 per ticket. Apply this information in terms of what this tells us about the elasticities of supply and demand. Given your analysis of these elasticities, on whom does the tax burden fall....the tickets sellers, the fans or both? Why?

Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes.

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