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Virtual Business Sports

Virtual Business Sports. Pricing. The Main Product of a Sports Franchise is Seats(tickets). Pricing Conflict. A team would rather sell a seat for $1 than leave it empty However, if all seats are sold for $1, the team will not make a profit

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Virtual Business Sports

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  1. Virtual Business Sports Pricing

  2. The Main Product of a Sports Franchise is Seats(tickets)

  3. Pricing Conflict • A team would rather sell a seat for $1 than leave it empty • However, if all seats are sold for $1, the team will not make a profit • If prices are set too high there will not be enough demand • If prices are set too low profits will not be maximized

  4. Goods & Services are Supplied to Consumer Demand

  5. Laws of Supply & Demand • Law of Demand: The amount consumers are willing to buy varies with price. • Price Demand Price Demand • Law of Supply: The amount producers are willing to make varies with price. • Price Supply Price Supply • Law of Diminishing Marginal Utility: Consumers will only buy so much of a product even if the price is low.

  6. If price is too high a surplus will exist Surplus Surplus Surplus: Supply exceeds demand

  7. If price is too low a shortage will exist Shortage: Demand exceeds supply Shortage Shortage

  8. Equilibrium is the Goal of all businesses Equilibrium Price – Price in which supply and demand meet at the same price.

  9. Elasticity The degree to which demand is effected by changes in price

  10. Elastic vs. Inelastic • Elastic Demand – Changes in price greatly effect demand (luxuries) • Inelastic Demand – Changes in price does not seriously effect demand (necessities) • Sports & Entertainment products are elastic in nature.

  11. Factors that must be covered by Prices • All Costs & Expenses • Breakeven Point: Determining the point at which business expenses are covered and there is not a loss or profit. • Profit • Markup(margin): The amount of profit added to the breakeven point.

  12. Pricing Terms • Price: The amount of money you charge customers for one unit which should reflect what customers will pay. • Revenue: Money that is brought into the business, mostly through sales(unit sales x price). • Demand: Amt. Of goods or services customers are willing to buy at a given price • Yeild Management Pricing: Pricing strategy used whenever the quantity of a product is fixed(I.E. seats) to maximize profits by selling better tickets at higher prices or when demand increases.

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