Ticket Prices On The Sports Industry

2569 WordsNov 20, 201411 Pages
Ticket Prices in the Sports Industry Why are tickets to sporting events so expensive? Ticket resale has been a concern to people who determine ticket price as well as the fans. If tickets are too expensive to begin with, then there will be a lot of unsold tickets. If tickets are very cheap, they will be purchased from the primary market quickly, and then sold on the secondary market at an increased price. Owners of sports teams and the league should allow the market to control ticket prices. Ticket prices are based off the demand of the game, team, and league which has resulted in tickets being sold at market value rather than face value. Ticket prices vary across the leagues as well as pricing strategies. Teams should continue to profit-maximize by charging various amounts for tickets in order to charge the closest amount to first-degree price discrimination. TICKET PRICE Prices for a good or service is determined by supply and demand. For tickets to sporting events, there are a set number of tickets which means the quantity is limited and set long before the season starts. The supply curve is perfectly inelastic at the stadium’s capacity. This means that the marginal cost is close to zero until the stadium’s capacity is reached. Depending on where this quantity lies relative to the demand curve determines whether the team will decide to sell out or have empty seats. If the team maximizes profits by not selling out, then the team will decide to have empty

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