The availability of alternative entertainment methods has resulted in a large decrease in theme-park visitors. To help the theme-park operators, the government is contemplating imposing a price floor for theme-park tickets or provide a subsidy to theme park visitors. Appraise the welfare effects of these two policies with suitable theme-mark market diagrams. Your diagrams should take into consideration of the price elasticity of demand and supply of theme-park in general.

The availability of alternative entertainment methods has resulted in a large decrease in theme-park visitors. To help the theme-park operators, the government is contemplating imposing a price floor for theme-park tickets or provide a subsidy to theme park visitors. Appraise the welfare effects of these two policies with suitable theme-mark market diagrams. Your diagrams should take into consideration of the price elasticity of demand and supply of theme-park in general.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 15SQ

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The availability of alternative entertainment methods has resulted in a large decrease in theme-park visitors. To help the theme-park operators, the government is contemplating imposing a price floor for theme-park tickets or provide a subsidy to theme park visitors. Appraise the welfare effects of these two policies with suitable theme-mark market diagrams. Your diagrams should take into consideration of the price elasticity of demand and supply of theme-park in general. For Price Floor, is the PED = elastic and PES = inelastic? For Subsidy, is the PED = elastic and PES = inelastic? Please explain why
The number of people willing to buy tickets to the Super Bowl is invariably greater than the number of tickets (and seats) available. This is evidence that the price of the tickets is a.equal to the equilibrium price since the number of tickets bought equals the number sold. b.lower than the equilibrium price. c.higher than the equilibrium price. d.higher than the equilibrium price when the demand is inelastic but lower when the demand is elastic.
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