Question

Use the marginal revenue and marginal cost curve from the theory of clubs to explain why the NFL has 32 teams while the Bundesliga-1, the top German soccer league, has only 20 teams.

Answer 1

There several reasons why German soccer league has fewer number of team as compared to US NFL, which has 32 teams and the reasons are explained below.

Explanation:

• Germany is a smaller in size as compare to US; the revenue from adding new groups into the league is smaller in quantity than the United States. This indicates that income generation by adding an extra team is a smaller in amount than in USA.

• With less income being generated this would mean Germany will have fairly less profit as compared to the USA

• Hence, the top range of groups is inferior in European nation than the US.