Question

Every year, Super Bowl tickets are sold in the black market at a significantly higher price. This indicates, these tickets are priced below free market price resulting creating demand or shortage. Refer to the graph on shortage in Chapter 3 and explain the scalping of Super Bowl ticket with such a graph. You can use straight line demand and supply curves.

Answer 1

According to he question mention, there is scenario of excess demand for tickets then the actual supply which is limited due to sitting of venue.

Which in return increases the prices of the tickets as black market and also encourage the scalpers to get the maximum benefit.

This can be understand through the graph :

with the mentioned diagram it is clear that, the role of black marketing or the scalpers came in rol due to the excess demand, and the actual price of ticket being less than the equilibrium price, which gives the space or room to scalpers to earn more.

as seen in graph , supply is limited because of the limited seatd but demand for tickets is more due to craze for the event happening in the super bowl , thus creating the excess demand or say shortage , thus giving more room to scalpers to purchase the bulk tickets at actual price of tickets P0 and sell them to the maximum ,thus making overall profit[ yellow being highlighted as scalper's profit].

this can be safeguard by keeping the price of ticket at equilibrium price and also, creating few tickets zone to be premium zone so that there is less room for scalpers to buy the tickets in bulk thus reducing there profit and discouraging them.