Question

1) Suppose a league is comprised of a larger (L) and smaller revenue (S) team. WL and Ws are their respective winning percents, and their marginal revenue functions are (values in millions of dollars): MR320 320 W MRs 140-140 Ws a) What will be the values of WL and Ws in equilibrium? b) Find the price of talent. c) What will be the total payrolls for the large and small markets? d) Show your answers graphically using the MRL/ MRs graph presented in class. Be sure to label the equilibrium price of talent. Show your work.

Answer 1

If K is a large number, it means that the equilibrium concentration of the products is large. In this case, the reaction as written will proceed to the right (resulting in an increase in the concentration of products) If K is a small number, it means that theequilibrium concentration of the reactants is large.

Students often get confused about how it is possible for the position of equilibrium to change as you change the conditions of a reaction, although the equilibrium constant may remain the same.

Changing concentrations

The facts

Equilibrium constants aren't changed if you change the concentrations of things present in the equilibrium. The only thing that changes an equilibrium constant is a change of temperature.

The position of equilibrium is changed if you change the concentration of something present in the mixture. According to Le Chatelier's Principle, the position of equilibrium moves in such a way as to tend to undo the change that you have made.

Suppose you have an equilibrium established between four substances A, B, C and D.

A + 2EB

According to Le Chatelier's Principle, if you decrease the concentration of C, for example, the position of equilibrium will move to the right to increase the concentration again.

the demand curve DL and MRs represent AR and MR curves in the larger revenue team.

Ds and MRs represents the average revenue and the Marginal curve in the smaller revenue team.

The horizontal summation of Dl and Ds give the total demand curve for the two teams

The League's marginal cost is shown by MC that intersect MR. mr = mc.

The problem that a monopolist faces is that the sole of his output OQ CANNOT BE SOLD IN ANY ONE OF THE TEAM AS WE HAVE IN OUR QUESTION AT A PROFIT MAXIMISING PRICE OR A WINNING PERCENTAGE.

league has to allocate between the 2 markets or teams in such proportion, that is MC must equal to MR. t his s done by by drawing a line from point T parallel to x axis through MRs and MRl.

The point of intercesssion S and R ON CURVES mrL AND mrS RESPECTIVELY.

the league maximizes his profit in the larger revenue team by selling oql units at price aql and in team b by sellng oqs units at price bqs.oql+oqs =oq.Thus the winning team is the larger revenue team with larger winning percentage

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