Use the theory of supply and demand to explain ticket scalping. Who are the winners and losers in ticket scalping and why?This is for an economics class. if possible then please add any reference...

Use the theory of supply and demand to explain ticket scalping. Who are the winners and losers in ticket scalping and why?

This is for an economics class. if possible then please add any reference too. Use the theory of supply and demand to explain ticket scalping. Who are the winners and losers in ticket scalping and wh

Asked on by sara212

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stolperia's profile pic

stolperia | (Level 1) Educator Emeritus

Posted on

In a situation where ticket scalping is occurring, there are fewer tickets available for purchase than there are potential buyers - the supply does not meet the demand. Because of this, those individuals who have the few tickets that are available for sale can increase the asking price of those tickets. The assumption is that someone will want the tickets badly enough (high enough degree of demand) to agree to pay whatever inflated price is being requested.

Assuming this scenario, the persons selling the tickets are the surest winners - they are going to receive more than face value for the tickets they have to sell. Persons buying the tickets win in the sense of being able to attend the event for which the tickets are being sold but are losers in terms of the amount of money spent for the tickets.

justaguide's profile pic

justaguide | College Teacher | (Level 2) Distinguished Educator

Posted on

Ticket scalping occurs when the price at which tickets are being sold by event organizers is lower than the price that some buyers are willing to pay. In spite of the demand for the tickets being more than the supply the original sellers are willing to sell the tickets at a price less than what the equilibrium price actually is. The tickets are bought by scalpers at a lower rate from the original sellers and then resold at a higher price to the final customers.

Those making a gain here are the scalpers. As they play the role of intermediary between the sellers and the buyers, they are able to keep a part of the revenue earned from selling the tickets. The buyers are losers here as they have to pay more than what the actual price of the tickets is. So are the original sellers, as they could have earned more if they had sold the tickets at a higher price closer to the equilibrium price; but which they did not do as they wanted to accommodate those who could not afford to pay a higher price.

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