Professional football teams earn substantial revenues through ticket sales. (Note: each team is the only seller for the tickets). To maximize profit, they offer significantly lower ticket prices for children (whose demand is elastic) than those for adults (whose demand is inelastic). This discount may be as much as 50 percent. If this type of price discrimination increases revenue and profit, why don’t teams also price discriminate at the concession stands by offering half-price soft drinks and peanuts to children? Critically discuss.

Professional football teams earn substantial revenues through ticket sales. (Note: each team is the only seller for the tickets). To maximize profit, they offer significantly lower ticket prices for children (whose demand is elastic) than those for adults (whose demand is inelastic). This discount may be as much as 50 percent. If this type of price discrimination increases revenue and profit, why don’t teams also price discriminate at the concession stands by offering half-price soft drinks and peanuts to children? Critically discuss.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter9: Monopoly

Section: Chapter Questions

Problem 20SQ

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