A-Level Edexcel Business Business Growth: Using a supply and demand diagra

Question

Using a supply and demand diagram, assess two reasons why live entertainment business revenues in the UK might have increased in 2017.

**Supply and Demand Diagram**

![Supply and Demand Diagram](link_to_diagram)

In the diagram above, the initial equilibrium price is at P1 with the corresponding quantity Q1. As demand increases, represented by the shift from D1 to D2, the equilibrium price moves to P2 and quantity to Q2.

**Reasons for Increase in Revenues**
1. **Increase in Festivals and Live Events**: The number of festivals and live performances increased in 2017, likely due to favorable weather conditions. More events mean more options for consumers, which increases demand, shifting the demand curve to the right (from D1 to D2). This increase in demand can lead to higher revenues for the entertainment industry as more tickets are sold.

2. **Popularity of New Shows**: The introduction of popular shows like Hamilton generated significant public interest. These types of performances can often command higher ticket prices, and because demand in such markets is relatively inelastic, even a small increase in price can lead to a substantial increase in revenue. Hence, even with potentially decreased attendance, revenues might still rise due to higher ticket pricing strategies.

Overall, various factors such as increased supply of entertainment options and successful marketing of high-demand shows contributed to the growth in revenues in 2017.

Using a supply and demand diagram, assess two reasons why live entertainment business revenues in the UK might have increased in 2017 - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3

Worked Solution & Example Answer:Using a supply and demand diagram, assess two reasons why live entertainment business revenues in the UK might have increased in 2017 - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3

Increase in Festivals and Live Events

Popularity of New Shows

Join the A-Level students using SimpleStudy...