Supply and Demand Essay
Part 1: Chapter 6 Wall Street Journal Questions
1) Why are sports teams considering switching to a variable–pricing strategy for tickets?
Sports teams are switching to a variable-pricing strategy for tickets so that they can get a higher profit on games with record attendance numbers. They feel the need to do so because the marginal costs, such as construction payment and players’ salaries, did not equal to the marginal revenue, since attendance was severely dropping. To pay for the marginal cost, the sports team needed to capitalize on things that they were sure of, like increasing attendances to games between major sporting rivals.
2) What would happen …show more content…
5) How will the change in prices affect the demand for each product?
Because it is an inelastic product, paper would remain at a high demand despite increases in prices. However, there is a possibility that someone discovers a substitution for paper over time. The demand for paper would then be lowered. A decrease in anything, especially something as commonly used as gas, would yield a higher demand because the opportunity costs are little in goods that are affordable. The consumers might even have a bit of extra cash saved to spend on