1. Which of the following accurately describes an increase in the demand for spo
ID: 1131904 • Letter: 1
Question
1. Which of the following accurately describes an increase in the demand for sports tickets?
a. an organization reduces ticket prices, causing demand to shift rightward
b. fans of the sport experience an increase in their incomes, and sports tickets are a normal good
c. an organization subtracts player talent to its roster, thus reducing the popularity of the team
d. an organization raises ticket prices, causing a movement along the existing demand curve for tickets
2. We can express a sports franchise’s gate revenue (RG) as RG = Rh + (1-)Ra. Regarding this expression,
a. Rh and Ra represent the marginal revenue product of players in home and away games, respectively
b. represents the percentage of gate revenue retained by the home team
c. Rh represents the franchise’s broadcast revenue and Ra represents its licensing revenue
d. RG = Ra if no revenue is shared
3. A sports organization that successfully engages in price discrimination
a. will maximize profit in one market but maximize revenue in the other
b. charges a higher price to fans who exhibit greater elasticity of demand
c. charges a higher price to fans who exhibit lesser elasticity of demand
d. will operate such that MR > MC to maximize profit in each separated market
4. We generally assume that sports organizations
a. are perfectly competitive and thus face perfectly elastic demand
b. are perfectly competitive and thus face perfectly inelastic demand
c. are not perfectly competitive and thus face down-sloping demand
d. are not perfectly competitive and thus face perfectly elastic demand
5. A sports organization that engages in inelastic ticket pricing
a. faces a U-shaped total revenue function
b. prices its tickets where marginal revenue is equal to zero
c. prices its tickets within the decreasing range of total revenue
d. earns the maximum possible ticket revenue
Explanation / Answer
1. Change in price causes only movement along the demand curve ( i.e. quantity demanded changes with change in price) and it doesn't shift the demand curve because price isn't a determinant of demand curve.
However, if a good is normal good then demand increases with increase in income. Therefore, if sports fans experience an increase in their incomes and if sports tickets are normal good then it accurately describes an increase in the demand for sports tickets.
Answer- option B
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.