1) A popular musician is performing in a one-off concert. The capacity of the concert hall is 8,000 seats, each seat requires a ticket, and the musician will only perform if the tickets are completely sold-out, so the supply for tickets is perfectly price inelastic. Due to the musician's high popularity, the demand for tickets is relatively price inelastic.

1. Explain what we mean by the price elasticity of demand, and the price elasticity of supply, giving a simple mathematical expression for both.

1. Draw a sketch showing the shape of the perfectly inelastic supply curve and the relatively inelastic demand curve and describe what you have drawn. Demand and Supply should be plotted on the Y axis and number of tickets on the X axis.

1. Just before tickets go on sale, suppose that the musician announces a second performance, which will take place on the night following the first performance so long as it sells out completely. On a new graph, sketch the supply and demand curve(s) from part b and new supply and demand curve(s) which include the second performance, and explain how the market equilibrium will change with the release of new tickets.