Economics

mm [20 pts] In the NBA, the owners share revenue but not costs. Suppose that the Clippers sell only general-admission seats to a home game with visiting Sixers. The inverse demand for the tickets to game is p = 100 0.00\"}. The Clippers have a contract with the arena owners such that the Clippers pay the arena owners $10 per attendee. but all their other costs [e.g. player salaries} are sunk, so their effective cost function is C(Q) = 10Q. [a] Find the Clippers' prot-maximizing number of tickets and price if the Clippers must giver 50% of revenue to the Sixers. Find also the Clipper' s profit and the Sixer's revenue. [b] Now suppose instead that the Sixers get to choose the price for the game. What price will they choose, how many tickets will be sold, and what revenues will they receive? Explain [briey] why the answers to a and b are different [c] Now suppose that the Clippers again set the price, and share their profit rather than revenue. The Clippers keep 45% of their prot and give 55% to the Sixers. Find the prot-maximizing price, the number of tickets sold. Is this better for the clubs collectively? [d] Explain briey why the owners share revenue rather than prots