Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 6, Problem 1IAPA
To determine
The reason for a hefty
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The following table describes the demand for season tickets at Powerhouse University, a perennial football power
Price per ticket per game
Tickets Demanded
$80
105,000
$90
100,000
$100
93,000
$110
85,000
$120
75,000
Currently the stadium seats 75,000 and season tickets are priced at $110. if the university expands the stadium to seat
90,000 and they do not raise ticket prices, by how much will revenue increase per game?
3.2. The stadium of the MANU has 30 seats. The demand curve for tickets has a price intercept of $36 and a quantity intercept of 72.3.2.1. Draw the supply and demand curves to scale (in Excel and copy it to your word answer-This demand curve has the form P = 36−0.5×Q.)
3.2.2. Determine the equilibrium admission price, and the amount of revenue generated from ticket sales for eachgame.
3.2.3. A local alumnus and benefactor offer to install 6 more seats at no cost to the University. Compute the price that would be charged with this new supply and compute the revenue that would accrue at this new equilibrium price. Should the MANU accept the offer to install the seats?
12. The Vanier Cup, the finals of Canadian University football, was held on November 26, 2016
at Tim Hortons Field in Hamilton, Ontario. The organizers learned a lot are already planning
next year's event! Based on what they learned this year, they know that the demand function
for tickets to the game will be given by q = 200, 000 - 10, 000p, where p is the price charged
per ticket. The chief organizer for next year is an ambitious person who wants to set prices
so as to maximize revenue.
(b)
Write down an expression for the inverse demand function (price as a function of
quantity), total revenue (as a function of quantity), and marginal revenue (as a function
of quantity).
Find the quantity and price that generate maximum revenue.
(c) Derive an expression for the elasticity of ticket demand with respect to price. (Hint:
your elasticity should be a function of the price, p.) What is the value of the elasticity
at the revenue-maximizing price (your answer for price from part b)?
Chapter 6 Solutions
Foundations of Economics (8th Edition)
Ch. 6 - Prob. 1SPPACh. 6 - Prob. 2SPPACh. 6 - Prob. 3SPPACh. 6 - Prob. 4SPPACh. 6 - Prob. 5SPPACh. 6 - Prob. 6SPPACh. 6 - Prob. 7SPPACh. 6 - Prob. 8SPPACh. 6 - Prob. 9SPPACh. 6 - Prob. 10SPPA
Ch. 6 - Prob. 11SPPACh. 6 - Prob. 12SPPACh. 6 - Prob. 1IAPACh. 6 - Prob. 2IAPACh. 6 - Prob. 3IAPACh. 6 - Prob. 4IAPACh. 6 - Prob. 5IAPACh. 6 - Prob. 6IAPACh. 6 - Prob. 7IAPACh. 6 - Prob. 8IAPACh. 6 - Prob. 9IAPACh. 6 - Prob. 1MCQCh. 6 - Prob. 2MCQCh. 6 - Prob. 3MCQCh. 6 - Prob. 4MCQCh. 6 - Prob. 5MCQCh. 6 - Prob. 6MCQCh. 6 - Prob. 7MCQ
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