Question

There is a shortage of college basketball and football tickets for some games, and a surplus occurs for other games The following graph shows the market for the football team home games. Suppose that your favorite football team has a stadium that seats 15,000 people and that for every game during the season, the football team administrators charge $15 for tickets. The demand curve for the tickets for the top-of-the-league games is labeled DTop and the demand curve for the tickets for the low-ranked games is labeled DLow On the following graph, use the green points (triangle symbol) to plot the supply curve for the tickets for the football team home game. Then use the grey points (star symbol) to plot the demand curve according to the team administrators

Answer 1

(a) Supply curve is perfectly inelastic and vertical at quantity of 15,000. The demand curve as per administrators is horizontal and perfectly elastic at $15, plotted as follows.

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(b) Price of $15 will result in 15,000 tickets sold (since maximum capacity is 15,000 seats).

(c) When playing against Top-ranking rival, relevant demand curve is DTop.

Number of tickets demanded is 40,000, which means there is shortage because quantity of tickets demanded exceeds quantity of tickets supplied.

(d) When playing against Low-ranking rival, relevant demand curve is DLow.

Quantity of tickets supplied exceeds quantity of tickets demanded (15,000 > 10,000), which will result in surplus.