02 May Question: This activity is important because around the world many economies- including those of the United…
This activity is important because around the world many economies- including those of the United States, Canada, and Japan – are based on free enterprise, and many communist and socialist countries, such as China and Russla, are applying more principles of free enterprise to their own economic systems. Free enterprise provides an opportunity for a business to succeed or fail on the basis of market demand. In a free enterprise system, companies are most likely to be successful if they can efficiently manufacture and sell products that consumers desire. The goal of this exercise is to demonstrate your understanding of the concepts of Free Enterprise and how a busines may succeed or fail on the basis of market demand. Read the case below and answer the questions that follow Part I: Once upon a time, long, long ago, people camped outside ticket offices and waited in long lines to buy tickets. The Internet has changed all that. Ticketmaster.com is known as the legitimate site for purchasing tickets, but scalping Web sites have also popped up. Scalpers are well versed in logging on the minute tickets go on sale on Ticketmaster.com or another legitimate site and purchasing tickets at face value for resale at higher prices. A survey of U2 concertgoers in New York revealed that about 29 percent of concertgoers confessed to purchasing their tickets from unauthorized sites. In 2005, the highest price on eBay for two Madison Square Garden U2 tickets was $4,250 Part II: StubHub recently listed Coldplay tickets for up to $ 2.942 each; TicketsNow listed two front row Rolling Stones tickets for $ 7,410. These markups are huge: face-value tickets for the Rolling Stones concert, for example, sell from $ 60 to $ 450. In an effort to combat scalping, many singers and groups Issue tickets directly to their fan club members However, managers of fan sites struggle to prevent scalpers from becoming fan club members. One Coldplay fan site was able to stop three scalping companies from buying presale tickets on the Coldplay fan site Part Ill: Purchasing tickets online through unauthorized agents can pose risks. In some states scalping is illegal, and in others there is a legal limit to how much a scalper can mark up the ticket price. However, these laws often go unenforced nd most were written prior to the Internet and do not cover out-of-state purchases made online. Buyers run the far more al risk of purchasing counterfeit tickets. Ticketmaster will, for a fee, send buyers their tickets via email, allowing them to int the tickets themselves. In May 2005, a few hundred concertgoers showed up at a U2 concert with what turned out to be Ticketmaster tickets printed multiple times
How do the forces of supply and demand affect the sale of ticket prices? Multiple Choice As demand for tickets increases and supply of tickets decreases, the cost of tickets increases As demand for tickets decreases and supply of tickets decreases, the cost of tickets decreases As demand for tickets decreases and supply of tickets increases, the cost of tickets increases. As demand for tickets increases and supply of tickets decreases, the cost of tickets decreases
Which of the following best describes the negative impact of ticket scalping? Multiple Choice Scalping decreases the availability of tickets through traditional channels, causing ticket price to increase. Scalping decreases the availability of tickets through traditional channels, causing demand to decrease Scalping decreases the availability of tickets through traditional channels, causing demand to increase. Scalping decreases the availability of tickets through traditional channels, causing ticket price to decrease.
Which of the following scenarios involving scalpers is likely to result in prices for consumers that are lower than the initial price listed by the legitimate retaller? Multple Choice Scalpers purchase tickets that are undesrable to consumers, forcing the scapers to ฒction the tickets at a price lower than the original price offered by the retailer Scalpers purchase all available tickets, allowing them to control the price offered to the general public Aner scalpers purchase tickets, it is announced that a desirable and popular guest drummer will join the bandd All of these choices are correct
Scalpers often artificially decrease supply by releasing tickets in waves, making it impossible for consumers to know how many tickets remain. This causes the equilibrlum price to Multiple Choice Increase Decrease Remain constant Become zero Become irrelevant
In some states there are legal limits to how much a scalper can mark up the price of tickets. Of what type of economy does this suggest? Multiple Choice Modified capitalism ices Pure Capitalism Communism Socialism
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