Question

Suppose that a television studio has two shows, X and Z, and that tickets for viewing the taping of each show is free. The equilibrium price for a ticket to view the taping of show X is $25 and the cquilibrium price for a ticket to view the taping of show B is -$20. It is likely that tickets to show ___ will need to be rationed on a first-come-first-served basis, while the producers of show ___ will have a much more difficult time filling the seats in the studio since the dollar amount. equilibrium price for tickets to that show is a ___ dollar amount. a. X; Z; negative b. Z; X; negative c. X; Z; positive d. Z; X; positive

Answer 1

The correct answer is a. X; Z; negative. Show X has a high demand, hence the tickets are likely to be rationed on a first-come-first-served basis. Show Z has limited interest, making it harder for the producers to fill the studio seats.

Step-by-step explanation:

The answer to this question is a. X; Z; negative. The equilibrium price of a ticket to view the taping of show X is $25, indicating that there is a high demand for the show and, as a result, the tickets are likely to be rationed on a first-come-first-served basis. Conversely, the equilibrium price for a ticket to view the taping of show Z is -$20, implying a negative value, which represents decreased interest in the show, making it more difficult for the producers to fill the seats in the studio. This situation is a result of supply and demand dynamics in the market.

Let's briefly consider the concept of a price floor using the example of struggling movie theaters in a city, as illustrated in figure 3.24 (b). The city government imposes a price floor to prevent the closure of these movie theaters, shifting the production and consumer surpluses in the process, yet resulting in a deadweight loss. This example helps to illustrate the complexities of pricing dynamics.

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