Question 1: Explain why the profit maximizing behavior of teams can lead to competitive imbalance. Under what conditions will competitive balance emerge from the profit maximizing behavior of teams in a sports league? Question 2: In 2007 the Boston Red Sox had a payroll of $163.1 million. How much was their luxury tax bill? Question 3: Explain why peak load pricing is not price discrimination Question 4: Suppose that the demand for tickets is given by P=50 -0.000250 ..and that marginal revenue is MR=50 - 0.0050 a) If the marginal cost of an additional spectator is zero, what is the profit-maximizing price? b) If the stadium seating capacity is 80.000, what should the price be