ECON 2P03 Quiz: VI Soccer League Practice Question
13 Dec 2017
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The answers are at the bottom of the page; see if you get the same ones. A european soccer league faces demand for generic advertising by league franchises of pl = 12000 - . 04q. Q is measured in minutes of commercial airtime. It has to pay an advertising agency the price the ad agency charges it, pa plus it costs an additional per minute to get the ad on the air. The ad agency can produce one minute of commercials for . How many advertising minutes will be produced and what will be the profit of the vertically integrated firm: assume the league and ad agency file tax returns separately. Answers: q = 74950 and the ad agency charges per minute. Agency profit = ,400,200 and league profit = ,700,100. Q = 149,900 and profit = ,800,400 4.
