BUS502 Principles of Economics for Accountants 代写
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BUS502 Principles of Economics for Accountants – Semester One 2017
Assessment task 2 – Responses to articles - Article 2
DUE via Safe Assign 5pm Sunday 7th May (Note this is later than in Course Outline!)
Super Bowl XLVIII Pricing: A Lesson In Demand Elasticity
by Patrick Rishe from Forbes 19 September 2013
http://www.forbes.com/sites/prishe/2013/09/19/super-bowl-xlviii-pricing-a-lesson-in-demand-elasticity/#3635195c6b23
Access the article at the URL given above and read it carefully. Based on your reading, answer the questions in the spaces below. Use full sentences and show all necessary working but do not use more space than is given here. Other references are not necessary but, if you do use any (for example, online economics glossaries) please list at least the URL of your source. Marks are shown and total
[15].
(1) Patrick Rishe claims that “professional sports teams typically price their inventory in the inelastic portion of their demand functions.”
(a) What is meant by inelastic demand? If Rishe is correct, why will pricing in this way not maximize revenue from ticket sales? [3]
(b) What reasons are there for not maximizing revenue from ticket sales? [2]
(2) (a) Prices for two types of seats as set at two different venues are reported in the article. Complete the table to show these prices. [1]
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New York |
New Orleans |
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Club level |
$ |
$ |
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Lower bowl |
$ |
$ |
(b) Why do the ticket prices in NY differ so much from those in New Orleans? [1]
(c) In almost all cases, there is evidence of “a positive secondary price mark-up over face.” For example, “many $600 tickets sold for $2,000.” Explain what this means and why it is evidence of considerable consumer surplus at the set ticket prices. [2]
BUS502 Principles of Economics for Accountants 代写
(3) The diagram below shows the market for a “lower bowl” ticket in New York. Q* is the number of lower bowl seats available at MetLife Stadium.
(a) On the assumption that a price will be set to sell every seat, add the appropriate supply schedule to the diagram. [1]
(b) Mark the equilibrium price (in $s) for a lower bowl seat on the diagram. [1]
(c) Shade in and label the area that represents consumer surplus. [1]
(d) Shade in and label the area that represents producer surplus. [1]
(e) Now, suppose that the price was increased above the price that would lead to every seat being sold. Explain how this would this affect consumer and producer surplus. [2]
BUS502 Principles of Economics for Accountants 代写
