There's a well known result in Econ 101 (I need to write this chapter for Env-Econ 1010 sometime) that if the demand for a good is elastic*, lowering the price will increase revenues, and vice-versa. If the demand is inelastic, then lowering the price lowers revenue. Unfortunately it's rare to get a nice clean real world example to demonstrate this. But here's one:
Sports fans who have long criticized their favorite teams for the prices they charge at the stadium might finally get their wish of cheaper concessions.
That's what could happen if others follow the lead of Atlanta Falcons and United owner Arthur Blank, whose group revealed Thursday that, despite lowering their food and beverage prices to the lowest in all of major professional American sports, fans actually spent more.
Steve Cannon, CEO of the AMB Group, Blank's holding company, told ESPN that although food and beverage prices were 50 percent lower in its new Mercedes-Benz Stadium than the prices in the Georgia Dome the previous year, fans spent 16 percent more.
"There's a huge value in delighting your fan base, to make them as happy as they could possibly be," Cannon said. "We started with one of the biggest pain points and it paid off."
