View the step-by-step solution to:

# A minor league baseball team is trying to predict sales for the upcoming season and is considering changing ticket prices.

A minor league baseball team is trying to predict sales for the upcoming season and is considering changing ticket prices.

A. The elasticity of ticket sales with respect to the size of the local population is estimated to be about .7. Briefly explain what this number means. If the local population increases from 60,000 to 61,500, what is the predicted change in ticket sales?

B. Currently, a typical fan pays an average ticket price of \$10. The price elasticity of demand for tickets is -.6. Management is thinking of raising the average ticket price to \$11. Compute the predicted percentage change in tickets sold. Would you expect ticket revenues to rise or fall?

C. The typical fan also consumes \$8 worth of refreshments at the game. Thus, at the original \$10 average price, each admission generates \$18 in total revenue for team management. Would raising ticket prices to \$11 increase or reduce total revenue? Provide a careful explanation of your finding. (Hint: If you wish, you may assume a certain number of tickets sold per game, say 5,000. However, to answer the question the precise number of tickets need not be specified.)

A minor league baseball team is trying to predict sales for the upcoming season and is considering changing ticket prices. A. The elasticity of ticket sales with respect to the size of the local...

### Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

### -

Educational Resources
• ### -

Study Documents

Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

Browse Documents