Answer to Question #108345 in Microeconomics for alishba jamil

Question

suppose that the price of basketball tickets at your college is determined by market forces
currently the demand and supply schedules are as follows:
price quantity demanded quantity supplied
4 10000 8000
8 8000 8000
12 6000 8000
16 4000 8000
20 2000 8000
a] draw the demand and supply curves what is unusual about this supply curve?why might this be true
b] what are the equilibrium price and quantity of tickets
c] your college plans to increase total enrollment next year by 5000 students the additional students will have the following demand schedule:
price quantity demanded
4 4000
8 3000
12 2000
16 1000
20 0

now add the old demand schedule and the demand schedule for the new students to calculate the new demand schedule for the entire college what will be the new equilibrium price and quantity?

Answer 1

a] the demand curve is a downward-sloping line and supply curve is a vertical line. It is possible, if the quantity supplied is fixed at any price.

b] The equilibrium price is 8 and the equilibrium quantity is 8000 tickets.

c] The new equilibrium price is 12 and the equilibrium quantity is the same: 8000 tickets.