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Use Figure Two below to answer Question Three. MRP5[o=1) FIGURE TWO D 5 7 8 10 Talent Purchased by LM' Team 3. Figure Two on
Use Figure Two below to answer Question Three. MRP5[o=1) FIGURE TWO D 5 7 8 10 Talent Purchased by LM' Team 3. Figure Two on the previous page illustrates the impact of a league policy which shares 40% of the home-gate revenues in this two-team league, and for which the xed level of talent is 10 units. Refer explicitly to the points given on the graph to illustratefidentify your answers and give the dollar-amounts whenever possible. a. What is the equilibrium distribution of talent (TL* and Ts*) without gate sharing? b. What is P; BEFORE, and AFTER, gate sharing? c. What happens to TL as the result of gate sharing? d. What happens to T3 as the result of gate sharing? e. What is PAY; BEFORE, and AFTER, gate sharing? f. What is PAYS\" BEFORE, and AFTER, gate sharing? g. What is total income (PAY: + PAYS\") paid out to all players BEFORE, and AFTER, gate sharing? h. What happens to competitive balance because of gate sharing? i. Would you expect the Players Union to support or oppose gate sharing? Why
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