Elasticity of Demand, Business Economics

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 :







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
Related Questions
how does the effect of inflation affect the spending ability of fixed income earners

PROBLEMS OF LOWER INCOME COUNTRIES There are vast income and wealth disparities in world we live in. Approximately one-fourth of the world’s population accounts for the three-f

Is the impact of globalisation a problem? Globalisation consider as to the increasing integration of national economies into terms of financial flows, trade, concepts, informa

Expansionary fiscal policy happens when the government cuts spending. How?

Explain critics of the International Monetary Fund argue. Critics of the International Monetary Fund (IMF) argue: • The IMF is suffering through mission creep and requiremen

is indian companies running a risk by not giving attention to cost cutting?

Why is debt management difficult in Less Developed Countries? One of the biggest challenges facing Less Developed Countries debt management is making sure $ interest payments c

Explain how getting right price affected the market for promoting development. Getting prices right implies: • Abolishing price controls as well as subsides on fundamentals.

Question: Extract of the Speech by Mr Thomas Jordan, Chairman of the Governing Board of the Swiss National Bank, at the Swiss Banking Global Symposium, Zurich, 16 November 2012

interaction between the two market force, demand and supply