Elasticity of Demand, Business Economics

Assignment Help:
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)

Related Discussions:- Elasticity of Demand

Business Math, Scenario: A client comes to you for investment advice on his...

Scenario: A client comes to you for investment advice on his $500,000 winnings from the lottery. He has been offered the following options by three different financial institutions

What is the marshal plan, What is the Marshal Plan? Marshal Plan: ...

What is the Marshal Plan? Marshal Plan: The Marshal Plan noticed massive aid to post war Europe that led to quick recovery. That Marshal Aid helped but the accurate social

Micro and macro, micro and macro economicsapplied to business environment

micro and macro economicsapplied to business environment

Production function, Suppose a firm’s budget were large enough to employ 10...

Suppose a firm’s budget were large enough to employ 100 units of either labor or capital, the cost of a unit of labor being the same as a unit of capital. The production function i

Business process outsourcing, Question: (a) Describe the meaning of Bus...

Question: (a) Describe the meaning of Business Process Outsourcing (BPO). (b) BPO deals mainly with non-core processes of an organization. Describe four of such type of pr

.answer, Is Indian companies running a risk by not giving attention to cost...

Is Indian companies running a risk by not giving attention to cost cutting stion..

Explain about the long-run economic growth, Explain about the long-run econ...

Explain about the long-run economic growth. Long-Run Economic Growth: Secular or long-run growth is the continued upward trend into aggregate output per person over many

Payback method to analyse business , The managing director of Christine plc...

The managing director of Christine plc, a company which specialises in acquiring small businesses, has considered the following potential investments. Only one of these investments

Location decision, what are the steps in location decision.

what are the steps in location decision.

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