Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows: Price Quantity Demanded Quantity Supplied $4 10,000 tickets 8,000 tickets 8 8,000 8,000 12 6,000 8,000 16 4,000 8,000 20 2,000 8,000 a) Draw the demand and supply curves. What is unusual about this supply curve? Why might this be true? b) What are the equilibrium price and quantity of tickets? c) Your college plans to increase total enrollment next year by 5,000 students. The additional students will have the following demand schedule:
Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows:
|
Price |
Quantity Demanded |
Quantity Supplied |
|
$4 |
10,000 tickets |
8,000 tickets |
|
8 |
8,000 |
8,000 |
|
12 |
6,000 |
8,000 |
|
16 |
4,000 |
8,000 |
|
20 |
2,000 |
8,000 |
a) Draw the demand and supply curves. What is unusual about this supply curve? Why might this be true?
b) What are the
c) Your college plans to increase total enrollment next year by 5,000 students. The additional students will have the following demand schedule:
|
Price |
Quantity Demanded |
|
$4 |
4,000 tickets |
|
8 |
3,000 |
|
12 |
2,000 |
|
16 |
1,000 |
|
20 |
0 |
Now add the old demand schedule and the demand schedule for the new students to calculate the new demand schedule for the entire college. What will be the new equilibrium price and quantity?
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