Question
For years, Big State University could seat only 50,000 fans in their football stadium. The stated ticket price for home games was $30. Each year
For years, Big State University could seat only 50,000 fans in their football stadium. The stated ticket price for home games was $30. Each year when BSU plays one of its top rivalry games at home, ticket scalper are able to fetch $60 per ticket when sold just prior to the game. Assuming that the price elasticity of demand for BSU home rivalry games is 0.6, answer the questions that follow. a. How many tickets could BSU have sold if they had the seating capacity to accommodate all buyers that wanted a ticket at the stated price of $30 per ticket? b. Next season, BSU has expanded the stadium to seat 65,000 fans. Assume that the demand for seats at the top rivalry games is the same as in the past. Predict the approximate price of tickets being sold outside the stadium by scalpers at the games after the expansion.
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