8 Week Managerial Economics

Sports teams are switching to a variable-pricing strategy for tickets so that they can get a higher profit on games with record attendance numbers. They feel the need to do so because the marginal costs, such as construction payment and players’ salaries, did not equal to the marginal revenue, since attendance was severely dropping. To pay for the marginal cost, the sports team needed to capitalize on things that they were sure of, like increasing attendances to games between major sporting rivals.

The Honest Company should introduce its products using the price skinning model, introducing their products at an initially high price, the short-run profit-maximizing price; Price skimming is intended to gain as much profit for the firm as possible in each production period (Douglas, 2012). As a new company the initial short term profits are vital for developing the

Porter and Thomas claim that half of the NFL teams advertise their season ticket waiting list online and that all of them have sold out at least some of their major sections of season tickets, which is consistent with the profit maximizing behavior of team owners. Thus, the persistent shortage may be rational in a case of exceeded demand, making the product more valuable. Therefore, placing ticket prices into the inelastic region of demand is closely related to politically supported subsidies, which restores the balance of low pricing policy. Additionally, the NFL also uses a form of price-discrimination to influence their subsidies. However, ultimately, the NFL uses the public choice model. Moreover, the public choice model is when there is

An estimated regression coefficient is 10 with a standard error of 5. The null hypothesis is that the partial regression coefficient equals zero. What is the value of the t-statistic for testing the null hypothesis of the regression coefficient?

If you go ahead and stay in the business for two years, your business might earn either {$180,000} (success), or lose {-$100,000} (slight failure), or lose {-$700,000} (major failure), all with 1/3 probability. The numbers are expressed in terms of net profits, your profits after deducting ALL costs (including sunk equipment costs). The day after your business opens, it will be reviewed in the Sydney Morning Herald, and that review will tell you with almost perfect certainty whether the business will be a success, a slight failure, or a major failure. What do you do at that stage?

The main source of income in professional sports has transitioned from ticket sales to mass media such as TV and Radio. Professional Football peaked at a perfect time to spread popularity, the information era, where news stories and updates are constantly spread over the internet, newspaper, and television. This new medium to sell their sport has caused an extreme popularity increase and number of football fans. Since 1960, ticket prices and stadium sizes have doubled. This proves a huge increase in revenue due to ticket sales, and ticket sales are still overshadowed by the new broadcasting business. The NFL makes over a billion dollars a season from the consumer and their TV viewing habits and sponsors are willing to pay $75,000 for a single minute of advertising(Bell, P.3). The National Football League is making a multi-billion dollar business in the new age of entertainment, and the players are millionaires because of it.

Sports economist believe that the sports tickets are priced lower because the team owners understand how to capitalize on community subsidies when making decisions on where to locate their team. The team owners court the fans in the community through advertisement and low ticket prices, as well as, pursue influential government officials in a price discrimination manner in order to gain the desired subsidy. In order to acquire high subsidies from a community the team franchise will offer lower ticket prices to gain the government subsidy.

Recently, however, the pricing of tickets for many sports arenas have taken to the dynamic pricing model, which involves unlimited price alterations to ticket prices. This paper will use a case study to analyze the changes that may occur to the baseball fan base due to these changes. This paper focuses on dynamic pricing model and its application in sports and other service industries like transport. It involves a tedious process that requires accurate forecasting and pricing of game tickets to avoid making too many price alterations before a given game. This paper will evaluate the benefits of the dynamic pricing model and explain its role in determining the price elasticity of demand for games. It will also evaluate the suitability and positioning of other variables in the marketing mix that may benefit users of the dynamic pricing model. Each of the elements of the marketing mix will be expounded so that the reader can understand the workability of the dynamic pricing model. The paper will further cover the suitability of dynamic pricing concept in basketball games, and how competition affects the level of prices set for single basketball

Sports economist believe ticket prices are too low because economist believe the reasoning behind lower ticket prices was due to “The accumulated empirical evidence that reveals hat low prices for professional sports are a deliberate strategy of team owners” (Porter & Thomas, 2010, p. 701). Furthermore, lower ticket prices was intentionally and knowingly done as part of a strategy of the team owners. Likewise, the team owners purposely priced the tickets lower where demand was inelastic and excess demand existed. Many believed this was evidence that the owners priced the tickets lower to influence the political outcome. Furthermore, these tickets were being sold at unbefitting profit maximizing prices.

The article “Ticket Price Determination in Professional Sports: An Empirical Analysis of the NBA, NFL, NHL, and Major League Baseball.” was researched and created by two economists named, Patrick Rishe and Michael Mondello. The basis of this article was to analyze why the prices of tickets tend to vary from city to city within each league and also to provide the reader with information regarding whether ticket price increases are tied to changes in team payroll. Rishe and Mondello created and empirical model to get a more precise measurement than that of regressions done in the past. With this analysis Rishe and Mondello wanted to understand the impacts of salary caps on ticket price within a league so they involved two leagues without a salary

The ticket pricing environment has seen great changes over the last several years. With the integration of mobile technologies, one can literally purchase a ticket at the venue while waiting in line. These abilities provided by mobile technologies, along with several other factors, have changed the way customers buy tickets, and ultimately how much they spend on those tickets. Auburn University Football is a great example for how these changes impact firms as well as customers. While the University struggles to sell large blocks of tickets to donors, scalpers are waiting until a couple days before game time to sell tickets at three times face-value. This has uncovered a huge problem in the ticketing environment and has assisted in creation of a new concept in ticketing, dynamic pricing.

The rise of ticket prices for sporting events in America has spiraled out of control into a nosedive that may prove to be impossible to recover from. Dedicated fans of most economic status are becoming more inclined to watch sporting events on television than ever before, turning many families into perpetual couch potatoes. This is a direct result of the current greed of professional sports as a whole and continued rising ticket costs. With price increases ruthlessly applied over the years, the impact of increased ticket prices on middle class, and even professional sports “sticking it” to their season ticket holders, the effects have become

Any sports game ticket demand in North America is influenced by a number of factors:

For instance NFL tickets can start to get really pricey, an outing game for a family can start off as high as five-hundred dollars. Sports marketers can grab their customers by give something back to the fans. According to sportsbussinessdaily.com, nobody comprehends this superior to Dallas Cowboys proprietor Jerry Jones. Since a long time ago considered a nonconformist in the NFL, he has constantly promoted his group with wise and might.

If the players play only once, what strategy do you expect the players to adopt?