Question

Let D, represent the demand curve for premium seats to the Broadway hit Hamilton, and let S, represent the supply curve for these seats. If the producers of the show charge $497.50 for a premium seat, the scalpers will charge (a) S which is (b) more than the price listed at the theater's box office (give your answer to two decimals). Price S $1,200 - $1,097.50 $995 $796.25 $497.50 +- 400 700 1,000 1,500 Premium seats a week

Answer 1

Refer the given curve, at a price of $497.50

Quantity supplied=400 tickets

We can see that offer price can be as high as $1200 for this quantity supplied.

a)

So, scalpers will charges a price of $1200.

b)

It is $702.50 (1200-497.50) more than the price listed.

Part 3

a)

We can observe that demand and supply curve intersect each other at a price of $995 per ticket. So, its a equilibrium price. At this price there is neither a shortage nor surplus in the market. So, there is no scope of profit for scalpers.

So, correct option is

A. will not even bother buying tickets to resell

b)

Refer to above graph, we can see that a price of $995

Quantity demanded=Quantity supplied=1000

So, box office will sell 1000 premium tickets per week