7 The market for college athletes Suppose that Sam an excellent high school basketball player is being recruited by the

Question

7 The market for college athletes Suppose that Sam an excellent high school basketball player is being recruited by the University of California Berkeley that is Berkeley is the consumer In this example NCAA rules prevent universities from compensating student athletes more than the full cost of tuition Assume that recruiting for college athletes is organized under a perfectly competitive environment The following graph shows the supply of and demand for Sam s athletic services Suppose that Berkeley s annual tuition is 33 000 the amount scholarship money or the wage Sam receives in exchange for playing at Berkeley Shade the area representing Berkeley s consumers surplus using the green point triangle symbol Then shade the area representing Sam s total wage revenue using the purple point diamond symbol 60 WAGE Thousands of dollars 54 46 42 36 30 Demand 24 18 12 Tuition Sam s Athletic Services Supply A CS Total Wage

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