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Supply and demand is one of the basic concepts discussed in economics. Supply is the quantity of something that is available while demand is the quantity of something that people want. Face value refers to the initial cost of the ticket on which any service charge and tax have been added. The cost of tickets from scalpers is normally higher than face value in order to make some profit. The aim of this coursework paper is to examine the market for tickets for popular sporting events through the supply and demand model.
Popular event tickets can be bought at face value during the period of time depending on the ticket resale laws which touch the state one lives in and the one in which the event is to be held. For instance, one cannot buy or sell tickets with a cost more than face value, which includes fees and $ 1 for ticket, if the events are taking place in Sunshine state. Similarly, tickets cannot be bought or sold if they are more than face value which includes 45 % for venues with a capacity of more than 6,000 people if it includes fees and 20% charged for smaller venues ("Ticket Resale Laws, N. p).
How are the tickets originally rationed by the owners?
The owners sell the tickets at face value on first-come, first served basis. The owners rationed tickets trough lottery systems or some mechanisms which were less efficient.
Who gets the tickets at face value?
The fans who prefer to trade their time on the queue buy tickets at face value. Also, producers may accordingly see it as fair to give away tickets at printed face value to relatives, friends or business acquaintances.
How can the laws of supply and demand be used to explain this situation?
The prices paid to scalpers or through online for tickets are always below the equilibrium price when there is higher demand for tickets. Certainly, if the equilibrium price is initially charged, then there will be no scalping of tickets since at equilibrium price the quantity demanded is equal to the quantity supplied. Specific location and time at which entertainment events, such as open dances and country fairs, take place result to forces of supply and demand to determine the price of issuing tickets. In this case, they are sold in advance with a printed face value (Arnold, 75).
How is the market for popular sporting events and concerts different from most goods and services that we purchase?
Normally, much of the activity in the popular sporting event is not valued with market prices since the sports market does not produce goods or services. Unlike particular goods and services which are sold for the same price, tickets have varied prices even for those sold on the same day.
What role do ticket scalpers play in this process?
The ticket scalper buys tickets to a sporting event or an entertainment and then sells them at a higher price in the street for profit. The business of scalping the tickets is illegal but the process is common since buying tickets from a scalper is not illegal.
Do you think ticket scalpers are harmful or beneficial?
The scalpers are beneficial since they make the tickets available easily, especially when a line is expected, hence, save the time of the purchasers. This is seen by the unwillingness of those who buy tickets to testify against the scalpers, hence, it is even difficult to prosecute them whenever they are convicted.
Do you think ticket scalping should be legal?
Ticket scalping should be legal but there must be strict regulations for freelance scalping, especially sale activities just before the start of an event. It is a risk business so it is very easy to be convicted.