1. Assuming all firm in the industry have the same total cost function given in the previous exercise, find the long-run price established in the market.
2. The new Yankees Stadium opened in 2009 has 50,000 seating capacity. If the average ticket price is $60, the average attendance is 25000. When the ticket price is $45, the average attendance increases to 35000.
(a) Find the demand function for Yankees ticket, assuming it is linear.
(b) What price should the team charge for a ticket in order to maximize revenue?
(c) What would the attendance be at the revenue maximizing ticket price?
(d) Show that the price elasticity of demand at the revenue maximizing price and quantity is 1.