The local baseball team owner hires you to help maximize the team's profits. Assume your task is to maximize revenues from ticket sales. Your advice to the owner should be to
A. Set the ticket price in the inelastic region of the demand curve in order to increase revenues.
B. Set the price of tickets at the unitary elasticity price.
C. Set the price as low as possible to make sure the stadium is always full.
D. Raise the price as high as possible until the number of tickets sold begins to fall.
Answer: B
You might also like to view...
The Bank of Lithasia plans to increase its revenue by using demand deposits held with the bank for long-term investments. What is this process known as? Is there any risk associated with this process? If yes, how can the risk be reduced?
What will be an ideal response?
If average income increases, ceteris paribus, then there will be:
a. A movement along and a shift in the demand curve b. A shift of the demand curve. c. No effect on the demand curve, because income is not a ceteris paribus condition d. A movement along the demand curve
Exhibit 1A-1 Straight line
In Exhibit 1A-1, as X increases along the horizontal axis, from point A to point B on the line, the Y valuesÂ
A. increase so the relationship between X and Y is direct. B. decrease so the relationship between X and Y is inverse. C. remain unchanged so the relationship between X and Y is independent. D. change so the relationship between X and Y is variable.
In the figure below, if the price of the product increases from $5 to $6, then total revenue would:
A. Increase by $300
B. Decrease by $100
C. Decrease by $300
D. Stay the same