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10-09-2007, 03:01 PM
seventieslord's Avatar
Join Date: Mar 2006
Location: Regina, SK
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Originally Posted by Crease View Post
Actually, as the supply curve shifts to the right and assuming demand doesn't change at all, the equilibrium point drops. At some point, adding too many seats will create a surplus and force overall prices down just to break even.

Regardless, the profit matrix is a bell-curve. Starting with zero seats and increasing, profits will rise will rise, then continue to rise at a rate of diminishing returns. Eventually those returns are negative and costs will outweigh revenues.

I can guarantee every arena built has gone through a profit matrix to determine the number of seats that will maximize profits.
Not necessarily. I understand exactly what you're getting at, but in a city where the demand is that high, there is more demand for tickets. Just picture yourself as a lower-bowl season ticket holder at the ACC. Are you going to give up your seat or expect to pay less if the arena gets bigger?

The problem isn't the curve you're talking about, it's more about practicality than anything. I think they'd have made the ACC bigger if it coudl have still been a good place for 25,000 people to watch hockey.

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