Question 2. Suppose that the demand for tickets is given by PD = 1,000 - 100...
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Question 2. Suppose that the demand for tickets is given by PD = 1,000 - 100 x Q, marginal revenue is given by MR = 1,000-¹/50 x Q, and the supply for tickets which is equal to marginal cost is given by MC = Ps = 100. a. How many tickets would the team sell and at what price if it acted competitively? (Hint: Solve for Q when Ps= PD, then solve for PD.) b. How many tickets would it sell and at what price if it acted like a monopoly? (Hint: Solve for Q when MR = MC, then solve for PD.) c. Which strategy generates more revenue? (Hint: Revenue - PD x Q.) Question 2. Suppose that the demand for tickets is given by PD = 1,000 - 100 x Q, marginal revenue is given by MR = 1,000-¹/50 x Q, and the supply for tickets which is equal to marginal cost is given by MC = Ps = 100. a. How many tickets would the team sell and at what price if it acted competitively? (Hint: Solve for Q when Ps= PD, then solve for PD.) b. How many tickets would it sell and at what price if it acted like a monopoly? (Hint: Solve for Q when MR = MC, then solve for PD.) c. Which strategy generates more revenue? (Hint: Revenue - PD x Q.)
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a When the team acts competitively it aims to maximize its profit by setting the price equal to the ... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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