Draw a graph that shows the demand for a single stadium that holds games for the...

Draw a graph that shows the demand for a single stadium that holds games for the St. Louis Cardinals. Assume that the supply curve for seating is horizontal and then vertical. Further assume that you are graphing the attendance of one particular game on the horizontal axis. Graphically show and verbally explain why the price and quantity might be different after Dexter Fowler (star player) has joined the team than it was before.

Solutions

Expert Solution

Higher total cost will reduce demand, shifting demand curve left from D0 to D1. MR shifts left from M0 to M1. Equilibrium price falls from P0 to P1 and quantity falls from Q0 to Q1.

This raises demand, shifting demand curve right from D0 to D1. MR shifts right from M0 to M1. Equilibrium price rises from P0 to P1 and quantity rises from Q0 to Q1.

higher competition will reduce demand, shifting demand curve left from D0 to D1. MR shifts left from M0 to M1. Equilibrium price falls from P0 to P1 and quantity falls from Q0 to Q1.

Lower quality of team will reduce demand, shifting demand curve left from D0 to D1. MR shifts left from M0 to M1. Equilibrium price falls from P0 to P1 and quantity falls from Q0 to Q1.

Higher seasonal length will reduce demand, shifting demand curve left from D0 to D1. MR shifts left from M0 to M1. Equilibrium price falls from P0 to P1 and quantity falls from Q0 to Q1.

Following graph is applicable for cases (c), (d) and (e).

Rahul Sunny answered 1 year ago

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