Elasticity of demand, Managerial Economics

Assignment Help:

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

Bank rate , Bank Rate Bank rate is the rate at which the central bank ...

Bank Rate Bank rate is the rate at which the central bank gives loans to the commercial banks against the security of government and other approved first class securities. In

Monopolistic practices, MONOPOLISTIC PRACTICES The following practices...

MONOPOLISTIC PRACTICES The following practices may be said to characterize monopolies. Exclusive dealing to supply and collective boycott Producers agree to supply onl

Price elasticity of demand, Price Elasticity of Demand Is the respons...

Price Elasticity of Demand Is the responsiveness of the quantity demanded to changes in price; its co-efficient is Pe d    =  Proportionate change in quantity demanded

Manegerial economics, Profit maximiZation is theoretically the most sound b...

Profit maximiZation is theoretically the most sound but practically unattainable objective of business finns. Do you agree this statement? If agree give

An optimum population, An optimum Population Countries are often descr...

An optimum Population Countries are often described as under populated or overpopulated.  From the economist's viewpoint these terms do not refer to the population density (i.

Theory of demand, when the data is descrete and incremental changes is meas...

when the data is descrete and incremental changes is measurable, what is it?

Internal rate of return - incremental analysis, The following contains cost...

The following contains cost and benefit information for two different alternatives for a w capital investment in computerized process technologies to control the process at a manuf

Economic Model of a Company, I can''t figure out the economic model of a co...

I can''t figure out the economic model of a company that I''m supposed to write a report about. The company is a tier 2 supplier, and over the years has bought out several subsidia

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