Question

In: Economics

Suppose a pro sports franchise faces demand for tickets to its home events according to the...

Suppose a pro sports franchise faces demand for tickets to its home events according to the function Q = 13000 - 50P, where P is the price per ticket in dollars, and earns marginal revenue according to the function MR = 260 - 0.04Q, where Q is the quantity fo tickets. For this franchise, the vertical intercept of the demand function is

a. greater than the vertical intercept of the marginal revenue function

b. equal to the vertical intercept of the marginal revenue function

c. less than the vertical intercept of the marginal revenue function

d. equal to 13,000 tickets sold

Suppose the sports franchise discussed in item above incurs marginal costs according to the function MC = 80 + 0.01Q. Assuming the franchise is a profit-maximizer, it will generate consumer surplus in this market of:

a. $676,800

b. $259,200

c. $129,600

d. none of the above

Solutions

Expert Solution

Rahul Sunny answered 7 months ago
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