The Number of Seats Available in a Stadium Is Fixed

question 38

Multiple Choice

The number of seats available in a stadium is fixed at 80,000. The equilibrium price for a ticket to a football game at the stadium is $30. The equilibrium price for a ticket to a baseball game at the stadium is $20. Which of the following is true?

• A) Football games must be more expensive to produce than baseball games.
• B) The demand for baseball games must be more elastic than the demand for football games.
• C) The supply of baseball games must be less elastic than the supply of football games.
• D) The demand for each baseball game must be lower than the demand for each football game.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the reduction of the asset's value due to usage and age.

Period Cost

Expenses incurred during a specific time period that are not directly tied to production activities.

Fixed Costs

Expenses that do not change with production volume, remaining constant regardless of business activity level.

Relevant Range

The span of activity or volume in which the assumptions about fixed and variable cost behavior remain valid.