industrial economics - task 2

7/29/2019 Industrial Economics - Task 2

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NAMA KELOMPOK

[Year]

[TASK 2 OF INDUSTRY

ECONOMICS]


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PBL STEP Task 2 ( April 12th, 2012 )Type of task : Study Task

Difficult Words :

Cost of stewarding :the synonym with policy price of the spectators ( Festival, VIP, Tribune, etc.)

Demographic change :The changes in the structure of citizen in one country

Per capita income :The national income (GDP) divided by the number of population in one country

Spectator Income :demand for the people who watch the match

Marginal Cost Function :The marginal cost of an additional unit of output is the cost of the additional

inputs needed to produce that output. More formally, the marginal cost is the

derivative of total production costs with respect to the level of output. (MC =

TC/Q)

Price elasticity of demand :commonly known as just price elasticity) measures the rate of response of

quantity demanded due to a price change. The formula for the Price Elasticity of

Demand (PEoD) is:

PED = (% Change in Quantity Demanded)/(% Change in Price) Relegation system :

a rule that is adapted by a league leader ( about degradation )

Market segmentation :The process of classification by dividing the market into some clusters ( For

example : Demographic segmentation )

Uncertainty of Outcome :unpredictable outcome in the production


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Main Problem : Factor that determine the demand for spectators attendance at

professional football.

Learning Objective :

1. Explain the factors that influence the demand for spectators attendance at professionalfootball. ( Lia, Famy )

2. The response from consumers to changes in that factors (Nadia,Pequ)3. Companies policies to response the changes in the factors ( Ezra,Sena)RESULT : collected by email at least on Wednesday, April 18

th2012

1. Factors that influence the demand for spectators attendance at professionalfootball ( From Article)

a) PriceEconomic theory suggests a professional sports club should price its tickets in order to

maximize its revenue or profit. In practice, however, there is some empirical evidence tosuggest that many clubs fail to achieve this.

Suppose initially the club's marginal cost is zero. In this case, the club maximizes its

revenue by charging 20 per ticket and attracting 30,000 spectators: this is, equivalent to

maximizing the area of the rectangle beneath the market demand function.

b) City population and per capita incomeThere is a natural tendency for the strongest teams to be located in the cities with the

largest population and/or largest per capita incomes. Teams with the largest potential or

actual markets tend to generate the most income. In the long term this usually translates

into playing success.

c) Uncertainty of outcome and competitive balanceThere has been extensive debate concerning the usefulness of policy measures designed

to promote competitive balance and increase uncertainty of outcome:

d) Television and newspaper publicity


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In most countries professional sports such as football probably could not survive without

the free publicity they receive through newspaper, television and radio converge. Equally,

sports coverage is essential for the ability of the print and broadcasting media to attract

readers, viewers, listeners and therefore advertising revenue.

e) Geographic market segmentationFactors that have contributed to reduced geographic market segmentation have include:

Growth in private car ownership; Improvement in the road transport system; Demographic change (population is more mobile geographically); Increased media coverage of star players and leading teams.

f) Stadium facility and hooliganismSince the mid-1980s, incidents of hooliganism affecting English football at club level

have become much less frequent. Over the same period, the stadia of the most leadingclubs have been significantly upgraded or completely period seated viewing

accommodation only; many lower-division clubs have done so as well.

industrial economics - task 2

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