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TOPIC Market EquilibriumHOMEWORKTOPIC Instruction• Answer in A4 MS word format.• Answer to be 1 page only, font type times new roman, font size 12• Plagiarism Should be less than 20%.CASE STUDYEvery summer, New York City puts on free performance of Shakespeare in the Park. Tickets are distributed on a first-come-first-serve basis at the Delacorte. Theatre in the park beginning at 1 P.M. on the day of the show. People usually begin lining up at 6 A.M. when the park opens, by 10 A.M. the line has typically reached a length sufficient to give away all available tickets.When you examine the people standing in line for these tickets, most of them seem to be fairly young. Many carry book bags identifying them as students in one of New York’s many colleges. Of course, all college students may be fervent Shakespeare fans, but can you think of another reason for the composition of the line? Further, when you attend one of the plays and look around, the audience appears much older and much sleeker than the people who were standing in line. What is going on?While the tickets are “free” in terms of financial costs, their true price includes the value of the time spent standing in line. Thus the tickets are cheaper for people (for example, students) whose time value is lower than they are for high-wage earners, like an investment banker from Goldman Sachs. The true cost of a ticket is $0 plus the opportunity cost of the time spent in line. If the average person spends 4 hours in line, as done in the Central Park case, for someone with a high wage, the true cost of the ticket might be very high. For example, a lawyer who earns $300 an hour would be giving up $1,200 to wait in line. It should not surprise you to see more people waiting in line for whom the tickets are inexpensive.What about the people who are at the performance? Think about our discussion of the power of entrepreneurs. In this case, the students who stand in line as consumers of the tickets also can play a role as producers. In fact, the students can produce tickets relatively cheaply by waiting in line. They can then turn around and sell those tickets to the high-wage Shakespeare lovers. These days eBay is a great source of tickets to free events, sold by individuals with low opportunity costs of their time who queued up. Craigslist even provides listings for people who are willing to wait in line for you.QUESTIONS1. Describe in your own wording the market system of price from the above case study.2. Apply the concept of market forces to summarize the supply and demand for Shakespeare performance at the park?
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