Question

11. Problems and Applications Q11

Suppose that the price of basketball tickets at your college is determined by market forces. Currently, the demand and supply schedules are as follows:

Price	Quantity Demanded	Quantity Supplied
(Dollars)	(Tickets)	(Tickets)
4	15,000	8,000
8	12,000	8,000
12	8,000	8,000
16	6,000	8,000
20	3,000	8,000

Use the blue points (circle symbol) to graph the demand for basketball tickets. Then use the orange points (square symbol) to graph the supply of tickets. Finally, use the black point (plus symbol) to indicate the equilibrium price and quantity in this market.

Original DemandSupplyOriginal EquilibriumNew DemandNew Equilibrium0246810121416182020181614121086420Price of Tickets (Dollars)Quantity of Tickets (Thousands)

Your college plans to increase total enrollment next year by 6,000 students. The additional students will have the following demand schedule:

Price	Quantity Demanded
(Dollars)	(Tickets)
4	5,000
8	4,000
12	3,000
16	2,000
20	1,000

Add the old demand schedule and the demand schedule for the new students to calculate the new demand schedule for the entire college. Use the purple points (diamond symbol) to draw this new demand curve on the previous graph. Then use the grey point (star symbol) to indicate the new equilibrium price and quantity.

Answer 1

Suppose that there is a market for basketball tickets. Price of basketball is determined by market forces. The following table is showing the old demand and supply. PRICE Quantity Quantity supplied demanded 8000 15000 8 8000 12000 12 8000 8000 8000 6000 208000 3000 Graph the figure as shown below: Chart 1: Old demand Supply Price PRICE Demand 5000 15000 20000 8000 10000 Quantity Orange line is the supply curve and blue line is demand curve. The black plus symbol indicates the equilibrium point where equilibrium price is 12 and equilibrium quantity is 8000. The college decides to increase the enrolment. The following table is showing the new demand and supply.

PRICE Quantity Quantity supplied demanded 8000 8 8000 128 000 16 8000 20 8000 20000 16000 11000 8000 4000 Graph the figure as shown below: Chart 2: New demand curve Supply Price New Demand 5000 Old demand 8000 10000 15000 Quantity 20000 25000 Orange line is the supply curve and blue line is old demand curve and purple line is new old curve. The black plus symbol indicates the equilibrium point where equilibrium price is 16 and equilibrium quantity is 8000