EBK THE ECONOMICS OF SPORTS
6th Edition
ISBN: 9781351684491
Author: LEEDS
Publisher: YUZU
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Chapter 2, Problem 4P
To determine
Explain the changes in the
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1) The NCAA operates as a(n): A) Natural monopoly. B) For-profit cartel. C) Incidental cartel. D) Perfect-competitor in
collegiate athletics.
HOW SO ??
A university football team faces the following demand schedule shown for tickets for each home game it plays. The team plays in a
stadium that holds 60,000 fans. It estimates that its marginal cost of attendance, and thus for tickets sold, is zero. The table below
reflects this data:
Price per Ticket ($) Tickets per Game
100
80
60
40
20
0
Total revenue = $
20,000
40,000
60,000
80,000
100,000
Using this information, calculate how much total revenue the team will earn.
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- The following table describes the demand for season tickets at Powerhouse University, a perennial football power Price per ticket per game Tickets Demanded $80 105,000 $90 100,000 $100 93,000 $110 85,000 $120 75,000 Currently the stadium seats 75,000 and season tickets are priced at $110. if the university expands the stadium to seat 90,000 and they do not raise ticket prices, by how much will revenue increase per game?arrow_forwardHow did Lance Armstrong and the business of doping relate to the prisoner effect.arrow_forwardAccording to the readings, which of the following would likely NOT occur if college athletes could be paid in competitive markets? a. College coaches would earn lower salaries b. Subsidies from the academic side could increase c. Ticket prices would rise to cover the players’ salaries (assuming fan demand is unchanged) d. Fewer universities would have football programsarrow_forward
- Why would club goods not have a free rider problem?arrow_forwardMultiple answers may be correct:arrow_forwardnee Question 1. You are the pricing manager for a professional football team. Your stadium can seat 70,000 spectators. The marginal cost of selling another ticket (and thereby seating another spectator) is $0. Therefore, you are primarily interested in maximizing total revenue. For each of the following scenarios give the revenue-maximizing price. a. The demand for tickets at each game is 120,000 − 5,000p. b. The demand for tickets at each game is 120,000 − 4,000p. c. The demand for tickets at each game is 200,000 − 5,000p. d. The demand for tickets at each game is 180,000 − 4,000p.arrow_forward
- Xerox, the U.S. Postal Service, and McDonald's have enjoyed significant market power in the past. List and explain three major factors that have eroded this market power. Market power is eroded when A. better substitutes become available because the market has less competition. B. better substitutes become available because consumers will not be willing to pay as much for a good. C. fewer substitutes are available because the market has less supply. D. no substitutes are available because consumers have no choices. O E. fewer substitutes are available because consumers are more sensitive to prices. Market power is eroded when A. existing firms exit the market because this increases the profits of remaining firms. B. more firms enter selling different products because this introduces complements. C. more firms enter selling the same product because this increases competition. O D. barriers block entry of new firms because consumers will not be willing to pay as much for a good. E.…arrow_forwardIn response to the Supreme Court decision in NCAA v. Board of Regents of University of Oklahoma a. The number of football broadcasts increased and the price of televised games decreased b. NCAA restrictions on payments to college athletes were upheld c. The NCAA was permitted to require its members to give its basketball tournament priority over the National Invitational Tournament d. The NCAA was permitted to negotiate broadcast contracts for football and basketballarrow_forwardSupply and Demand Problems Follow the directions to create graphs and explanations. Looking at the market for Sacramento Kings Coffee Mugs: Draw supply and demand curves that follow the laws of supply and demand. Label the curves S and D, and label the equilibrium E. Also label the equilibrium quantity and equilibrium price. Suppose the Kings win the NBA championship, which is a big surprise, show what would happen on your graph (& labels) and explain it in words. Looking at the market for chocolate chip cookies: Draw supply and demand curves that follow the laws of supply and demand. Label the curves S and D, and label the equilibrium E. Also label the equilibrium quantity and equilibrium price. Suppose the cost of chocolate chips goes up, show how this will affect the graph (& labeling) and explain it in words. For the next two, draw a little graph to show your work and fill in each of the blanks correctly with one of the following words: increase, decrease,…arrow_forward
- Which of the following is part of the impact of restricting payments to college athletes? a. All athletes are paid less than their marginal revenue products b. Athletic departments make greater profits, which allows them to subsidize the school’s academic mission c. The demand for tickets and broadcast rights have been found to rise because of the popularity of amateurism among fans d. Rents are transferred from players, who are disproportionately black, to coaches who are largely whitearrow_forward2 Concerts and parking prices Taylor Swift is in the Bay Area and is giving two concerts on Friday night (in Stanford) and Saturday night, in Berkeley. Taylor Swift and her team can supply up to 50,000 tickets for each night at a constant marginal cost of $100. The stadium's capacity limit is 50,000, so no more than 50,000 people can attend the concert. Now suppose that at a price of zero, 50,000 tickets would be demanded in each of the cities. At a price of $200, demand would fall to zero. Further assume that demand is linear. Note that tickets have to be purchased on the same day, between 10 and 11am. For the questions below, you can solve the problem in a graph or choose to supplement your graphical analysis with calculations (note that in this case, demand is given by QD = 50,000 - 250p). 1. Draw supply and demand in a graph with tickets on the X-axis and the price on the Y-axis. 2. What will be the price of tickets and how many tickets will Taylor Swift sell at this price each…arrow_forwardHow do market frictions, such as long online queues and error messages, affect the supply and demand for tickets, and what impact does this have on the market?arrow_forward
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