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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
Question 1
Using a supply and demand diagram, assess two reasons why live entertainment business revenues in the UK might have increased in 2017. **Figure 1: Supply and Demand... show full transcript
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
Step 1
Reason 1: Increased Number of Festivals
Answer
The number of festivals has increased, which can lead to greater income for the live entertainment sector. As more festivals are organized throughout the year, there is a rise in ticket sales. This increased demand for tickets can cause a rightward shift in the demand curve, moving from D1 to D2 in the diagram. This shift indicates a higher quantity sold at each price, thereby increasing total revenue.
Step 2
Reason 2: New Shows and Performances
Answer
The introduction of popular shows, such as Hamilton, creates additional consumer interest and demand. Such performances attract larger audiences, who not only buy tickets but often spend more on associated refreshments and merchandise. This aspect makes the demand for these events relatively price inelastic. Therefore, a rise in ticket prices can also contribute to increased revenues as demand remains stable despite higher prices.