1. can you think of other products or services that have low marginal costs and high fixed costs and conversely? In the late spring and summer of 2015 Taylor Swift went on tour in part to promote her 1989 album. As economists we might want to think a bit about the cost structure of that tour.

For a rock concert, the output in question is a seat at a concert. Swift’s tour took place in indoor venues, large arenas like the MetLife Stadium in East Rutherford, New Jersey.

These venues have a maximum capacity, so there is a fixed number of seats that could be produced at a maximum. What are the fixed costs of producing a concert in a venue in New Jersey, say on July 15, 2015?