I need some help with the following question. The question is oriented to microe
ID: 1131975 • Letter: I
Question
I need some help with the following question. The question is oriented to microeconomics subjects
1) (a) Suppose that a group of sports fans is upset about the high price of tickets to many games. As a result of their lobbying efforts, a new law caps the maximum ticket price to any sporting event at $45. Will more people be able to attend the games? Explain your answer. Will certain teams and events be affected more than others? Provide examples.
(b) Defenders of Communist economic systems may point out that consumers pay lower prices for certain goods because the government imposes a limit on what producers may charge. Cite at least two other ways the consumers may be “paying” for these goods Answer the previous two question(a and b) and think about how they are related. What is the common theme?
Explanation / Answer
Ans 1(a)-The love of sports isnt going away in this country but I do not think the decline in attendance will keep happening. Most people just dont have that type of discretionary income to spend on sports. As for sports ticket prices, they have gone up over the years and not only a touch of irony.As teams try to attract more fans with expensive top tiers players and refurbished stadiums , thats making it more costly to attend games. Its a new way to bring in fans and sell tickets to games that wouldnt ordinary sell.
The drop off in attendance for live sporting events is etting worse, They have got a lot of competing factors in this, even bad weather , but with the economy still sorting itself out, there's the huge cost of going to live events plus fighting through traffic and parking just to get to the games.And even more important is the experience of watching games in the comfort of your home on big screen without the hassle at a stadium. But different sports have different problems like for example ;The fall off in baseball attendance has gone so bad, that the team with the lowest attendance figure has worst win-lose record decided to close the upper bowl of their stadium . Even baseball royalty, the New york have seen a decline, fans per game and are selling half off tickets through the online coupon. The attendance drops have spread like a fan wave.
Ans (b)- The price ceiling occurs when the government puts a legal limit on how high the price of a product can be. In order for a price ceiling to be effective, it must be set below the natural market equilibrium.When a price ceiling is set ,a shortage occurs. For the price that the ceiling is set at, there is more demand than there is at the equilibrium price, thus there is more quantity demanded than quantity supplied. an inefficiency occurs since at the price ceiling quantity supplied the marginal benefit exceeds the marginal cost. This inefficiency is equal to the deadweight welfare loss. If price ceiling is set then there must be a way to assign who gets the low supply of the product.there are several ways this is done without raising the price.
Considering above two (a) &(b) the one thing they are related to is 'Price' ,'Cost'' of economic system.