Two years ago, a popular men\'s basketball team, The Switchbacks, won the NCAA t
ID: 1102333 • Letter: T
Question
Two years ago, a popular men's basketball team, The Switchbacks, won the NCAA tournament and attendance at the games increased dramatically. Just one year later, the team placed last in their division. Comment on the type of price elasticity of demand you would expect to see in these two scenarios. Be specific as to what changes you would expect to see in the market for game tickets. The term "market" refers to price, quantity demanded, quantity supplied, demand, supply, market equilibrium and revenue to the school.
Explanation / Answer
Highly elastic demand means demand is highly responsive to change in prices. Here two years ago attendence at the game increased dramatically because the Switchback was popular. That is demand is highly inelastic. As demand will be increased because the good reputation of team. In this market price will be higher as for inelastic demand. Demand for ticket will be large. Revenue will be large
Next year they placed last. People could not want to see the match with high ticket price. So demand is elastic. Now price of the ticket will be lower because they want to attract more people. As demand is elastic and price is lower, revenue will be lower than previous.
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