Using supply and demand analysis, explain why there is sometimes a surplus of seats to watch a television show being taped and other times there is a shortage of such seats. Assume that tickets to view the taping of a television show are free of charge
The supply curve for seats in a television studio is vertical since there are a set number of seats in the studio at any point in time. The placement of the demand curve for seats depends upon the relative popularity of the show being taped. The demand curve for a relatively popular show will lie farther to the right than would the demand curve for a less popular, or new, show. At a price of zero, the quantity demanded of seats is very likely to exceed the quantity supplied of seats for a popular show, resulting in a shortage of seats. For a less popular show, the quantity supplied of seats could exceed the quantity demanded of seats at a price of zero, resulting in a surplus of seats.
Economics