Some baseball parks have a "7th Inning Stretch" where beer, hotdogs and other food items are offered for sale at a lower price
What economic concept is being used by the baseball park to justify this practice? If it is successful at selling more food and drink with this practice why don't they lower prices at the beginning of the game?
The economic concept is the law of diminishing marginal utility. By the 7th inning most of the patrons have already had a bite to eat and something to drink. As they become close to satiated they are deriving less and less marginal utility. Therefore, their willingness to pay to consume more of these items falls.
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When the demand for a product is more elastic than the supply
A) firms pay the majority of the tax on the product. B) consumers pay the entire tax on the product. C) consumers pay the majority of the tax on the product. D) firms pay the entire tax on the product.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C