Question

7. In Vancouver Sun newspaper, several fans and rock stars, were complaining the high price of concert tickets. One rock star argued, "It just isn't worth $75 to see me play. No one should have to pay that much to go to a concert." Assume this star sold out arenas around the country at an average ticket price of s75. a. How would you evaluate the arguments that ticket prices are too high? b. Suppose that due to this star's protests, ticket prices were lowered to $50. In what sense is this price too c. Suppose the rock star really wanted to bring down ticket prices. Since the band controls the supply of its d. Suppose the band's next CD was a total disaster. Do you think they would still have to worry about ticket Suppose the group announced their next tour was going to be their last. What effect would this likely ha low? Draw a diagram using supply and demand curves to support your argument. ervices, what do you recommend they do? Explain using a supply and demand diagram. prices being too high? Why or why not? Draw a supply and demand diagram to support your argument . on the demand for and price of tickets? Illustrate with a supply and demand diagram.

Answer 1

As per Chegg guidelines, first question is answered below Kindly ask rest of the questions in a separate post. a) Ticket prices to the concert are too high because the demand exceeds supply. Since supply is somewhat limited while demand is huge, it leads to excessively high prices. b) 75 50 QSQD The price of $50 is too low because at this price demand will be excessively higher than at $75 and will exceed the supply,creating a situation of shortage of tickets. This means the price is too low to clear the market

c) 95 75 P1 QD If the band wants to bring down the ticket prices, it can only do so only by increasing the supply of its concerts. With more frequent concerts being done, supply will meet the excess demand and bring down prices. d) 75 P1 QD If the band's next CD is a total disaster, the band would lose all its charm with the audience or its fan base, leading to a fall in the demand for its concert. This will shift the demand curve to the left, leading to a fall in its concert ticket prices.

e) P1 75 D" QD If the group announces its next tour to be its last, their fans would go in a frenzy and would wish to attend the last concert. As a result, demand for its concert tickets would rise, leading to an increase in the ticket prices