Lectures

Question 1

elasticity equation

Answer 1

elasticity equation =
% change in Q1
/
% change in P1

Question 2

elastic goods have increased revenue when

Answer 2

price is lowered

Question 3

inelastic goods have increased revenue when

Answer 3

price is raised

Question 4

the price of substitutes has _______ effect on demand

Answer 4

positive
(price of red wings tickets increase, price of pistons tickets also increase(

Question 5

____ is the only league with national tv deals only

Answer 5

NFL

Question 6

____ money is the biggest source of revenue for regional professional sports team

Answer 6

TV money

Question 7

prior to the 1980’s there were only __ tv networks

Answer 7

3
ABC
CBS
NBC

Question 8

regional sports networks and cable sports networks took off in

Answer 8

80’s and 90’s

Question 9

____ was the biggest source of revenue in the early days
- still a big source of revenue
- obvious large market advantage
- Yankees in 2015 had more than 5x of 7 teams together

Answer 9

ticketing

Question 10

NFL shares what percentage of gate
MLB shares what percentage of gate

Answer 10

45%
31%

Question 11

• concessions/parking
• luxury boxes,services

Answer 11

venue revenue

Question 12

• teams dont manufacture merchandise
• MLB, NFL, NBA league offices noegotiate licensing

Answer 12

licensing

Question 13

nearly all stadiums are sponsored teams have several official sponsors logos on jerseys

Answer 13

sponsorship

Question 14

NBA teams share what percentage of basketball-related revenue

Answer 14

50%

Question 15

anything that cannot be changed within our time frame
- stadiums
- long-term contracts

Answer 15

fixed costs

Question 16

are things we can adjust within our time frame

Answer 16

marginal costs

Question 17

• teams individually or private group-owned
• new teams cannot join without paying an expansion fee
• NFL, MLB, NBA

Answer 17

closed league

Question 18

• teams owned by individuals
• the league can be joined
• often broken up into tiers with promotion/regulation
• soccer leagues

Answer 18

open leagues

Question 19

• one entity owns all the teams
• original XFL

Answer 19

single entity

Question 20

• golf
• tennis
• combat sports

Answer 20

individual competition

Question 21

teams moving up a tier get a payment

Answer 21

balloon payments

Question 22

teams going down a tier get a payment

Answer 22

parachute payments

Question 23

• have less balance overall
• no tanking incentive
• less monopoly
• power-less ability to play cities off of each other for subsidized stadiums

Answer 23

open leagues

Question 24

consumer surplus equation

Answer 24

consumer surplus =
= WIP - price

Question 25

producer surplus equation

Answer 25

producer surplus = price - cost

Question 26

surplus that is not realized because of market power, taxes, or externalities

Answer 26

deadweight loss

Question 27

why are monopolies good in sports

Answer 27

concentration of talent produces a better product

Question 28

monopolies can use ______ _______ to target consumers that might otherwise be left out

Answer 28

price discrimination

Question 29

decreasing marginal product = slope getting what

Answer 29

slope getting flatter

Question 30

increasing marginal costs = slope getting what

Answer 30

slope getting steeper

Question 31

profit is maximized when

Answer 31

mr = mc

Question 32

differnet price for different games (not price discrimination)

Answer 32

variable pricing

Question 33

price changes as tickets are sold

Answer 33

dynamic pricing

Question 34

seasonal tickets, packages

Answer 34

bundling

Question 35

student tickets are an example of

Answer 35

general price discrimination