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

What is conditionality, What is Conditionality? Conditionality is the ...

What is Conditionality? Conditionality is the needs imposed onto countries as pre-conditions for loans. Into crisis situations member countries seek assist from the IMF for

Economic analysis of projects, Economic analysis is done from the viewpoint...

Economic analysis is done from the viewpoint of society or economy as a whole. The evaluation is done from a wider angle not merely in financial terms. . In 1936, Flood Control Act

Ethics, Discuss Morality in international context

Discuss Morality in international context

What is the development gap, What is the development gap? The developme...

What is the development gap? The development gap refers to the divergence between standards of living in the developed and developing world. As like Source World Bank:

Business cycle, Analyse the effect of contraction phase to the vulnerable s...

Analyse the effect of contraction phase to the vulnerable society

How does the exchange rate influence the benefits of trade, How does the ex...

How does the exchange rate influence the benefits of trade? Mutually beneficial international trade arises specified the exchange ratios lie among the internal opportunity cost

Major area of decision making, What are the major area of decision making ?...

What are the major area of decision making ? How does economic theory contribute to managerial decision ?

gnp rises, If nominal GNP enhances at a rate of 10 per cent per year where...

If nominal GNP enhances at a rate of 10 per cent per year whereas the GNP deflator enhances at 8 per cent per year then show how much real GNP rises. Explain?

What are harrod-domar predictions, What are Harrod-Domar predictions? T...

What are Harrod-Domar predictions? The economy is rate of growth, its predictions depends onto: • Capital formation and accumulation and capital output is the critical to de

Economic systems, the markert is said to be an invisible hand in the econom...

the markert is said to be an invisible hand in the economic system , how

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