CTP 02 - reduce the next season ticket prices or not Now...

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Lao Tat Sang Lao ECON 202 – David Bell April 12, 2010 CTP 02 Ticket Prices In today’s recession season, it is good news for customers to hear that the sales  price of products is decreasing. Also, price decreasing may be one of the ways for  companies to survive in recession. Therefore, I think Yankee made a right decision in  nowadays economy background. It might have a lot of reasons for Yankee to reduce the  ticket price, but I think the major reason is Yankee over supply their tickets. According to  the Demand-Supply curve, if seller over supply a product, it will receive the result of  surplus and cause prices down. Obviously, Yankee found that there were many empty  seats during the first homestand. If Yankee can’t sell them, it will be a surplus of seats.  Therefore, Demand-Supply can effectively help Yankee to know whether it should 
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Unformatted text preview: reduce the next season ticket prices or not. Now, here is the question. Yankee has a surplus of ticket, so it should reduce the prices, but what price should Yankee set? The answer is setting the price in equilibrium price. It is the price where the intentions of buyers and sellers match and quantity demanded equals quantity supplied. Yankee will sell all the tickets and get the maximum profit in this price. However, reducing ticket prices may be a bad news for the people who have already purchased tickets. Those people might think if they had bought the ticket later, they would have got the best deal. Even though Yankee offered free seat for them, some people may want cash back....
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This note was uploaded on 04/17/2011 for the course ECON 202 taught by Professor Kotlove during the Spring '11 term at Edmonds Community College.

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CTP 02 - reduce the next season ticket prices or not Now...

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