When the Raptors were in the playoffs the demand for tickets to their home games exceeded...

When the Raptors were in the playoffs the demand for tickets to their home games exceeded the number of available seats. Draw the diagram and explain what is likely to happen

Solutions

Expert Solution

As it is mentioned that when raptors were in playoff the the demand for ticket was greater than the available seats. This is possible only when the price is set below the equilibrium price. This will create shortage.

Refer the attached graph

From the above graph we can see the quantity demanded would be greater than the quantity supplied only when the price is set below the equilibrium price.

As demand is greater than supply. Therefore, in the market there will be shortage.

Since, there is shortage therefore, the pressure on the price will be upwards that is the price will increase. And it will continue to increase till the time price is equal to equilibrium price.

Note: The number of seats in the stadium is assumed to be constant in the short run.

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Rahul Sunny answered 1 year ago

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