The Local Baseball Team Owner Hires You to Help Maximize

question 42

Multiple Choice

The local baseball team owner hires you to help maximize the team's profits.You are told that costs are constant because enough help is always hired for a full stadium, so assume your task is to maximize revenues from ticket sales.Your advice to the owner should be to

• A) Set the ticket price in the inelastic region of the demand curve in order to increase revenues.
• B) Raise the price as high as possible until the number of tickets sold begins to fall.
• C) Set the price as low as possible to make sure the stadium is always full.
• D) Set the price of tickets at the unitary elasticity price.

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Definitions:

Investing Activities

Transactions and events that involve the purchase and sale of long-term assets and other investments, not directly related to the entity's normal line of business.

Long-Term Note

A debt security that matures in more than one year, requiring the borrower to repay the principal and interest over an extended period.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of an organization, such as issuing stocks or bonds, and repaying bank loans.

Decrease

The act of becoming smaller or fewer in size, amount, intensity, or degree; a reduction in value or quantity.