A large group of fans are upset about the high price of tickets to many events. As a result of their lobbying efforts, a new law caps the maximum ticket price to any sporting event at $50. Assume there are a fixed amount of seats in the stadium, all seats are available to be sold, and the price of tickets before the ceiling was at an equilibrium point above $50.The price ceiling will create a of tickets, which will be greater if demand is more , and people will attend the events.

a. surplus; elastic; more
b. shortage; inelastic; fewer
c. shortage; elastic; the same number of
d. surplus; elastic; fewer

C. shortage; elastic; the same number of

Explanation:

The law of demand states an inverse relationship between quantity demanded of a good and it's price.

Price elasticity of demand refers to the degree of responsiveness of quantity demanded to a change in price. When quantity demanded changes less relatively to change in price, it is termed as inelastic demand while when the change in quantity demanded is lot more than the change in price, it is termed as elastic demand.

In the given case, after the upper limit price has been capped and fixed, this would create a rush and tickets for the sports events would be sold off since the quantity demanded would rise.

This would result into a shortage since demand shall exceed supply and since the price cannot be raised above $50.

The more elastic the demand, more shortage of tickets it would result into and the same number of people will attend the events i.e the seating capacity is not increased.

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