11. Which of the following accurately describes the law of demand in a sports se
ID: 1131907 • Letter: 1
Question
11. Which of the following accurately describes the law of demand in a sports setting?
a. offering higher prices to a sports organization motivates the organization to make more game tickets available
b. when a sports organization raises ticket prices, it experiences a decrease in fan attendance
c. fans of a particular team experience an increase in income and therefore decide to attend more games per season
d. a sports organization signs better players and therefore wins more games
12. A sports organization that engages in inelastic pricing
a. operates where marginal revenue is negative
b. operates where marginal revenue is positive
c. operates where marginal revenue is zero
d. earns revenue only from gate receipts
13. We generally assume that sports organizations
a. face down sloping demand curves and are perfectly competitive
b. face down sloping demand curves and are not perfectly competitive
c. face flat demand curves and are perfectly competitive
d. face flat demand curves and are not perfectly competitive
14. In the expression RG = Rh + (1-)Ra,
a. RG = Ra if no revenue is shared
b. Rh represents the franchise’s broadcast revenue and Ra represents its licensing revenue
c. represents the percentage of gate revenue retained by the home team
d. the ratio /(1-) represents the percentage of gate revenue retained by the home team
15. Which of the following illustrates the presence of a normal good in a sports setting?
a. inner-city parking fees increase, causing a reduction in the demand for tickets to the local team’s home games
b. more sellers of sports souvenirs enter the market, resulting in a lower equilibrium price
c. a sports fan’s personal income increases, and he consequently buys fewer tickets to minor league baseball games
d. a sports fan’s personal income increases, and he consequently buys more of his favorite team’s souvenirs
Explanation / Answer
Answer(11) :- The law of demand can be described by the statement "When a sports organization raises ticket prices, it experiences a decrease in fan attendance", as law of demand states that when the price of a good rises them the quantity demanded for that good decreases , that is a negative relationship between price and quantity demanded.
Option (b) is correct.
Answer(12):- A sports organization that engages in inelastic pricing do "operates where marginal revenue is negative" i.e., MR<0, Option (a) is correct.
Answer(15):- The following statement illustrates the presence of a normal good in a sports setting.
"a sports fan’s personal income increases, and he consequently buys more of his favorite team’s souvenirs" . So for a normal good if Income of a person increases then his demand for that good will increase.
Option (d) is correct.
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