Question #1
A baseball team is trying to predict ticket sales for the upcoming season. They are also considering increasing prices. The market has a population of 2 million persons. The team sold 2 million tickets last year.
a—the elasticity of ticket sales with respect to the size of the population is estimated to about 0.8.
i—briefly explain what this number means? Hint—this means if population rises by 10%, what is the relevance of 0.7. (2 Points)

ii—Keeping mind the elasticity of tickets sales with respect to the size of the population is estimated to be 0.7, if the local population increases by 100,000, what does this mean for ticket sales? Please provide the change in the number of ticket’s demanded. (3 Points)

b—currently the ticket price is $10. The price elasticity of demand for tickets is -0.60. Compute the
predicted change in tickets sold if the price were raised to $13. Also what is the expected change in total revenue? (4 Points)

c—The typical fan also consumer $7 worth of refreshments at a game. Would raising ticket prices to
$12 increase or decrease overall total revenue (ticket revenue and refreshment revenue)? How much would it go up or down? (8 Points)

Posted Date: 4/7/2013 6:59:39 PM | Location :

Ask an Expert

Related Discussions:- Elasticity of Demand, Assignment Help, Ask Question on Elasticity of Demand, Get Answer, Expert's Help, Elasticity of Demand Discussions

Write discussion on Elasticity of Demand
Your posts are moderated

Write your message here..

Related Questions

Ethics, Discuss Morality in international context Discuss Morality in international context

Economic principle, #questDuring the 1990s, technological advance reduced t... #questDuring the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets are affected in ter

Baumol Sales Revenue, What is Baumol''s Sales Revenue What is Baumol''s Sales Revenue

The fit stop, Summary Strategy management Variables Rewards Summary Strategy management Variables Rewards

Research analysis, what are the abstracting and indexing services in social... what are the abstracting and indexing services in social science?

Prepare an interview plan for the post of business analyst, Prepare an inte... Prepare an interview plan for the post of Business Analyst in your team. a. Welcome then introductions/administrative objectives/agenda. Found rapport. b. Ask questions conc

Conditions increasing volume or frequency of quality control, In what condi... In what conditions might you consider increasing the volume and/or frequency of quality control checks? What time might you decrease their volume or frequency? A team member is

OPPOTUNITY COST THEORY, WHAT IS OPPOTUNITY COST? WHAT IS OPPOTUNITY COST?

Cournot model, Consider a Cournot duopoly. The market demand is p=190-q1-q2... Consider a Cournot duopoly. The market demand is p=190-q1-q2. Firm 1's marginal cost is 40, and firm 2's marginal cost is also 40. There are no fixed costs. A.    Derive every fir

Law of production, explain law of production explain law of production