Law of supply and demand:

You have been hired as an economic consultant to a firm that is trying figure out how to set their prices.

1.Identify the firm's major trouble areas and misconceptions and explain

2.Offer a strategic plan

FIRM 6 Dear Economist. HowdyPartner! MynameisRedandlamIEpremierrodeo promoter around these here parts. Boy howdy. do I have a question for you. Here's my sitcheeation. For years i have promoted a local rodeo that has sold out every Saturday night. I charge $15 a ticket and every seat is sold. Sometimes. I even have people waiting outside when all the seats are sold. This also gives rise to scalpers, which I HATE. They get more than $15 a ticket!!! Why does that happen? Recently I decided toexpand and I made my arena bigger by adding 6 new rows of seats so now I can get 8.000 people in the arena. But. I'm not selling out anymore! ldon't midetstand this at all. It's still the same good show, maybe even better! Why is this happening? The good news is. though, the scalpets don't come around as much. I hired some nerdy college kid who ran some kind of economic analysis and he says what I need to do is lower my price. which I'm not to thrilled about. Would that even work? Of course. my instinct is to do some more advertising and possibly even bring in more popular rodeo stars. I'm wondering if then 1 could even raise my prices!? Whaddya think? Ride on. Red Neckerson