Question

In: Economics

Use the following information for the following 5 questions. Assume that there are three types of...

Use the following information for the following 5 questions.

Assume that there are three types of teams in Major League Baseball: large market, medium market and small market. Each of these types has ten teams for a total of 30 teams. The demand function for each type of team is:

D_L: Q = 110 - 2P

D_M: Q = 80 - 2P

D_S: Q = 70 - 2P

Assume the marginal cost of a national advertisement is $610.

Question 1

What is the price Major League Baseball will pay for each advertisement?

Question 2

What is the number of advertisements Major League Baseball will buy as a league?

Question 3

How much will each large market team pay for its share of the advertising budget?

Question 4

How much will each medium-market team pay for its share of the advertising budget?

Question 5

How much will each small-market team pay for its share of the advertising budget?

Expert Solution

Rahul Sunny answered 1 year ago

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