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corie corie
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6 years ago
Residents in the city of Econoville enjoy only two types of recreational activities.  The activities are biking and attending concerts.  The demand for concert tickets is:   = 90,000 - 1,000 PC + PB.   The supply of biking trail permits is set at:   = 150,000.  The demand for biking trail permits is   = 250,000 - 1,000 PB + 20 PC.  The city wishes to expand seating capacity at concert events. 
To finance the concert hall expansion, the city is considering a tax of $5 per ticket.  Given that the city institutes this plan, the supply of concert tickets will become   = 75,000.  Before the expansion of the concert hall, the supply of concert tickets was fixed at 60,000.  What is the effect on equilibrium prices of the additional seating capacity and the $5 tax?  How much revenue does the tax generate?  Did concert ticket revenue increase due to adding seating capacity and the tax?
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Microeconomics

Microeconomics


Edition: 8th
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Bart_argBart_arg
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