In England football stadiums are usually built and financed by the private sector, but in some countries the stadiums are built and financed by the government. Many football stadiums in the English Premier League are full on match days. In the short run the supply of seats is perfectly inelastic. The football clubs could actually raise prices, still sell their tickets and so raise their profits. Premier League footballers currently receive very high wages.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. [2] A change in price causes no change in supply.
2. [1] Correct formula (1).
3. [1] A PES of 0 (1).
4. [1] A firm may be trying to grow
5. [1] to capture a larger share of the market/to increase pay and status of managers
6. [1] A firm may be trying to maximise sales revenue
7. [1] to make it easier to grow/gain market share
8. [1] A firm may be aiming for a reasonable but not maximum profit/profit satisficing
9. [1] in order to pursue other goals
10. [1] e.g. raising wages to keep workers happy
11. [1] A firm may not know what output will maximise profit
12. [1] due to lack of information about costs/demand
13. [1] A firm may be trying to survive
14. [1] in difficult situations
15. [1] May be in public sector/charity
16. [1] and thus have goals related to social welfare/reducing inequalities
17. [1] High demand
18. [1] due to high demand for the services of footballers
19. [1] many people want to watch football matches in stadiums
20. [1] on television
21. [1] Football clubs receive high incomes
22. [1] compete for players
23. [1] Low supply
24. [1] have to be skilled
25. [1] not many possess the skills
26. [1] Premier League players may have strong bargaining power
27. [1] through strong professional organisation/trade union/agents
28. [1] To compensate for negative aspects of the job
29. [1] e.g. risk of personal injury
30. [1] other relevant example
31. [1] Building sports stadiums may encourage people to participate in sport
32. [1] increase health/living standards
33. [1] It can generate jobs
34. [1] increase incomes
35. [1] reduce poverty
36. [1] Sports stadiums and sporting events may attract foreign tourists
37. [1] improve the current account of the balance of payments
38. [1] Generate government revenue which could be spent on e.g. health
39. [1] It will involve an opportunity cost
40. [1] the tax revenue could be used on e.g. education
41. [1] It may generate external costs
42. [1] e.g. noise suffered by local residents
43. [1] The private sector may be more efficient in building the stadiums
44. [1] profit motive
45. [1] Wasteful use of government funds
46. [1] since benefits may be mainly private benefits
47. [1] Those who visit the sports stadiums may be richer
48. [1] than some of the taxpayers
49. [1] redistribution of income from the poor to the rich
50. [1] Could result in a budget deficit
51. [1] or need to raise taxes