Elasticity of demand, Managerial Economics


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: 4/8/2013 10:31:38 AM | Location : United States







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
Question 1: Martha National County Club is a golf club in an isolated wealthy community and accepts only females as members. There are 1,000 identical female members of the club an

Ask questiHow does economic theory contribute to managerial decisions? on #Minimum 100 words accepted#

effects and implication of taxation in relation to managerial economics

Q. Central characteristics of Simon satisfying behaviour model? The pattern of policy commitments which result from the bargaining process can be seen to be a specification of

Using the CPS data, set the sample to women only and regress lnwage on education & MARRIED (which is 1 if married and 0 if not) and 1-MARRIED. Give a 95 percent confidence interval

Determine the studies of Managerial economics Managerial economics studies the application of techniques, principles as well as concepts of economics to managerial problems of

“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.

asumption and limitation of increemrntal,oppurtunity cost

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

The aim of monopolist is to maximise profit therefore; he would produce that level of output and charge that price which gives him maximum profits. He would be in equilibrium at th