Secondary Badger tickets

Suppose we are still analyzing the competitive secondary student ticket market for Badger football tickets. Assume there are 10,000 tickets in all. This is the quantity demanded by non-ticketholders at price $0. Suppliers have found that if they’re selling for anything less than $120, some non-ticketholders will demand tickets. Of course, at a price of $0, no one wants to sell their tickets. The current equilibrium price per ticket in this market is $72. Assume that both the market demand curve and the market supply curve are linear.

Given the above information, please answer the following questions:

a) What is the equation expressing dollar price per ticket in terms of quantity demanded (measured in tickets)? Use P to represent the ticket price, and Q_D to represent the quantity of tickets demanded. Express your equation in slope-intercept form.

b) What is the equilibrium quantity in the secondary student ticket market for Badger football tickets?

c) What is the equation expressing dollar price per ticket in terms of quantity supplied (measured in tickets)? Use P to represent the ticket price, and Q_S to represent the quantity of tickets supplied. Express your equation in slope-intercept form.

d) What if a consumer protection law is enacted such that no one can sell a ticket for more than $63 (3 times its face value)? Assume that all tickets in the secondary market are sold on eBay, making this consumer protection law completely enforceable. Describe the new equilibrium quantity and price for tickets in this market once this law is enacted. Illustrate your answer with a well-labeled graph. Is there a shortage or a surplus of tickets in this situation? Provide a numerical measure of the shortage or surplus.

pur-new-sol

Related Questions