The number of seats available in an arena is fixed at 20,000. The equilibrium price for a ticket to a basketball game at the arena is $80. The equilibrium price for a ticket to a hockey game at the arena is $95. Which of the following is true?
A) Basketball games must be more expensive to produce than hockey games.
B) The demand for hockey games must be more elastic than the demand for basketball games.
C) The supply of hockey games must be less elastic than the supply of basketball games.
D) The demand for each hockey game must be higher than the demand for each basketball game.

Question

Quizplus · Accepted Answer

The higher equilibrium price for hockey tickets ($95) compared to basketball tickets ($80) suggests that the demand for hockey games is higher. This is because, with a fixed number of seats (supply), the price is determined by how much people are willing to pay, which is a function of demand.

The Number of Seats Available in an Arena Is Fixed