Question
Suppose a municipal government wants to measure the gross benefit of a hockey arena that it owns and operates. Currently the municipality does not charge
Suppose a municipal government wants to measure the gross benefit of a hockey arena that it owns and operates. Currently the municipality does not charge an admission fee for the hockey arena and receives 400 visitors per month. In a comparable municipality, a privately owned hockey arena charges $5 for admission and receives 150 visitors per month. If we assume a linear demand curve passes through these two points, what would be the net benefit received by the users of the hockey arena if the municipality started charging an admission fee of $2?
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