Hand written solutions are strictly prohibited A sporting league has 8 teams. At the end of a season, team CM who was member owned doesnt renwe their license and leaves the league. For the next year's season, a private owner is awared the position for a new team (MM) which is private owned. Using a two team league model, explain what will happen to the talent distribution and unit cost of talent in the two team league compared to the previous year. Assume that: CM was a win maximiser MM is a profit maximiser Thr other club is a member owned win miximiser and generates the most revenue. This team name is MV The lower revenue generate by MM is the exact same as the one made by CM. The player labour market is characterised by players being free agents so no labour interventions no salary cap etc.

Hand written solutions are strictly prohibited A sporting league has 8 teams. At the end of a season, team CM who was member owned doesnt renwe their license and leaves the league. For the next year's season, a private owner is awared the position for a new team (MM) which is private owned. Using a two team league model, explain what will happen to the talent distribution and unit cost of talent in the two team league compared to the previous year. Assume that: CM was a win maximiser MM is a profit maximiser Thr other club is a member owned win miximiser and generates the most revenue. This team name is MV The lower revenue generate by MM is the exact same as the one made by CM. The player labour market is characterised by players being free agents so no labour interventions no salary cap etc.

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter16: Bargaining

Section: Chapter Questions

Problem 16.1IP

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