Reference no: EM132519438

The New York Yankees baseball team wishes to determine the equilibrium price for seats. The supply of seats at the ballpark is fixed at 40,000.

Price Quantity demanded in year 1 Quantity supplied

$100 50,000 40,000
$110 45,000 40,000
$120 40,000 40,000
$130 35,000 40,000
$140 30,000 40,000

• Calculate the price elasticity of supply.
• Calculate the price elasticity of demand when price increases from $120 to $130. Is the demand price elastic? Explain.
• Determine the equilibrium price and equilibrium quantity.
• Suppose the stadium is undergoing a renovation, the number of seats decreases by 10,000.
• Determine the new equilibrium price.
• Draw a graph to show the change in the equilibrium price and equilibrium quantity.