Elasticity of Demand, Business Economics

Assignment Help:
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)

Related Discussions:- Elasticity of Demand

What is meant by the term exception reporting, What is meant by the term ex...

What is meant by the term exception reporting? What are the advantages and the drawbacks of this type of reporting? Exception reports concentrate onto what has not gone as per

Elasticity, how the concept of elasticity used for policy formulation

how the concept of elasticity used for policy formulation

The causes and persistence of inflation, QUESTION (a) Analyse the activ...

QUESTION (a) Analyse the activist and non-activist policy makers' choice between implementing a policy rule or a discretionary monetary policy. (b) Explain why the policy ru

Identify the e-hr issues, QUESTION Case Study E -HR Strategy: An ...

QUESTION Case Study E -HR Strategy: An Electronic (E) Human Resource (HR) Strategy is attainable by small and medium sized business 1. Introduction This article is

How is gross domestic product capturing economic dimension, How is Gross Do...

How is Gross Domestic Product capturing the economic dimension of human well-being? GDP (Gross Domestic Product) only captures the economic dimension of human well-being. All c

Multiplier, How static multiplier can be shown diagramatcally

How static multiplier can be shown diagramatcally

What do you mean by the term project milestone, What do you mean by the ter...

What do you mean by the term project milestone? How would you decide how many milestones to demonstrate on your project plan? Project milestone: A milestone is a point at

Why is the growth rate and significant for development, Why is the growth r...

Why is the growth rate and significant for development? The rate of economic development is the percentage increase within real GDP over twelve months. • The higher rate of

Causes of market failures, Question: (a) Discuss the conditions necessa...

Question: (a) Discuss the conditions necessary to achieve Pareto Efficiency. (b) Competitive markets are generally assumed to lead to a Pareto optimal allocation of resource

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd