A MLB economist is very good at what she does. She has been tracking the demand for MLB tickets in the United States for years. She knows from past research that the demand curve looks like the one in Figure 2.4. MLB has just introduced a temporary price reduction on all general admission tickets from $15.00 per seat to $10.00 per seat. Given the demand curve and this decrease in price
from $15.00 to $10.00, she expects to see an increase in quantity from 5000 units (per week) to 10,000 units per week. However, she is surprised to see a surge in demand from 5000 units to
20,000 units. Clearly this new point A does not lie on the demand curve. What is going on here? Give an economic argument to justify the existence of this new point. Assume that the economist did not make a mistake in her calculations.
Figure 2.4

Question

A MLB economist is very good at what she does. She has been tracking the demand for MLB tickets in the United States for years. She knows from past research that the demand curve looks like the one in Figure 2.4. MLB has just introduced a temporary price reduction on all general admission tickets from $15.00 per seat to $10.00 per seat. Given the demand curve and this decrease in price
from $15.00 to $10.00, she expects to see an increase in quantity from 5000 units (per week) to 10,000 units per week. However, she is surprised to see a surge in demand from 5000 units to
20,000 units. Clearly this new point A does not lie on the demand curve. What is going on here? Give an economic argument to justify the existence of this new point. Assume that the economist did not make a mistake in her calculations.
  Figure 2.4

Quizplus · Accepted Answer

The Answer of A MLB economist is very good at what she does. She has been tracking the demand for MLB tickets in the United States for years. She knows from past research that the demand curve looks like the one in Figure 2.4. MLB has just introduced a temporary price reduction on all general admission tickets from $15.00 per seat to $10.00 per seat. Given the demand curve and this decrease in price
from $15.00 to $10.00, she expects to see an increase in quantity from 5000 units (per week) to 10,000 units per week. However, she is surprised to see a surge in demand from 5000 units to
20,000 units. Clearly this new point A does not lie on the demand curve. What is going on here? Give an economic argument to justify the existence of this new point. Assume that the economist did not make a mistake in her calculations.
  Figure 2.4

A MLB Economist Is Very Good at What She Does