Price Floor

All sports fans are exposed to the power of microeconomics: the black market. We are familiar with scalpers outside stadiums and also distributors on the Internet. Classmate Nathan Yu explains fans of bands or sports teams are willing to pay fortunes for live tickets. This incredible demand coupled with limited supply creates a massive shortage. Suppliers are unable to satisfy the desires of consumers, either due to government intervention (binding price ceiling) or limited supply. “Entrepreneurs” capitalize on this opportunity to monopolize the market, reaping enormous illegal profits (black market). At Qs, sellers realize consumer’s willingness to pay much more, thus selling at a price satisfying demand. The inability of supply and demand forces to reach free market levels is an issue, causing black markets, rationing, seller’s preferences, and first come first served policies.

Scalping

I have voluntarily been victimized by multiple black market operations. Paying free market prices for sporting event tickets is merely a fantasy. Five times the face-value of a Canucks or Olympics ticket is reasonable. The free, competitive market cannot be stopped, only disrupted. The market is a self-serving, self-sufficient machine that runs smoothly by itself, thus, I must accept the black market as a naturally occuring phenomenon.

Grey Market