You've been contacted by a local semi-professional team in Colfax, known locally as the Colfax Thunder. They play their home games at the HS baseball park for only $100 per month. They split the concession stand revenue with the school district 50/50, but get to keep all the merchandise sales for themselves. The season lasts 3 months with 2 home games per month, playing games against teams in the Pacific Northwest, including the Pullman Pirates, the Lewiston Lapdogs, and the Spokane Seawolves. The following are questions that the management team are asking you because they knew you took a sports economics class at WSU. Please answer the questions thoughtfully, and with detail to economic principles.
1. "We don't understand all this supply and demand stuff you're telling us. Can you draw us a graph to make it more clear? We like to think of our product as the attendance."
2. "Wait, I'm confused, the Pullman Pirates are a substitute for our team? What does that mean? What happens if we raise our prices? Are there any other substitutes in the area?"
3. "We're selling all our tickets right now for $10 each. We have roughly 30 people come to our games, and they each spend another $7 on average for concessions. Our payroll is only $500 per home game. We don't make any payments during away games. Our accountant mumbled something about our demand is inelastic. What does that mean, and what should we do? How much pro?t are we making each season?"
4. "How many tickets do we need to sell for each game in order to break even (zero pro?t)?"
5. "What are some ways we can increase revenue, we need to know at least 3 unique ways to increase revenue."
6. "Someone mumbled something about price discrimination in the bathroom the other day, isn't that illegal? How does that work?"