Suppose That Television Show a Is Much More Popular Than

question 34

Multiple Choice

Suppose that television show A is much more popular than television show B. The equilibrium price for a ticket to view the taping of show A is $40 and the equilibrium price for a ticket to view the taping of show B is -$30. If free tickets are offered for the taping of both shows,it is likely that

• A) there will be a shortage of tickets for show A and a surplus of tickets for show B.
• B) there will be a surplus of tickets for show A and a shortage of tickets for show B.
• C) there will be a surplus of tickets for both shows.
• D) there will be a shortage of tickets for both shows.

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Definitions:

Cut Throat Competition

An intense form of competition where businesses aggressively undercut each other's prices, often at the expense of profit margins.

Cartels

Agreements among competing firms in an industry to control prices, limit production, or divide markets, with the goal of maximizing collective profits.

Herfindahl-Hirschman Index

A measure of concentration calculated as the sum of the squares of the market share of each firm in an industry.

Largest Firm

The organization within a particular industry or market that has the highest revenue, market share, or workforce size.