HW 6 solution - Homework 6 Read the associated press...

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Homework 6 Read the associated press article “Pirates made $29.4m in 2007 and 2008.” After reading the article, answer the following questions 1) Describe the economic principles relating to this article. The main economic principle discussed is profit maximization. The owner of the Pittsburgh Pirates and other owners are trying to maximize their profits. They do so by increasing their revenues from league revenue sharing. Additionally they reduce costs by employing players with lower salaries. If the owners increased payroll by signing better players, the owners believe this would not increase revenues, and therefore would reduce their total profits . 2) Is this good or bad for the league? Explain. It is important to note that this question is asked from the perspective of the league. The League is the group of owners, and not an individual owner, player or fans. This could be good or bad for the league: Bad:
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HW 6 solution - Homework 6 Read the associated press...

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