Question

8 Use supply and demand curves to explain how the development of the interstate highway system, which allowed fans to travel much greater distances to watch ballgames, increased pay disparities between major league and minor league baseball players.

Answer 1

Development of major interstate highway system increased the accessibility of fans to travel great distances in order to watch the games. Major league matches were often held in world class stadiums which were easy to access thanks to the interstate highway system. While minor league matches are often held in small stadiums which are often not accessible via such highways, thus the audience for minor league was far low, which reduced the demand and thus the wages which could be paid to the minor league baseball players and thus the quality of the matches, which further declined as the best players were selected for major leagues.

Thus development of interstate highway system increased demand for major league matches, increasing the wages of the major league players.

Demand for major baseball league players increased, which increased the wages.

While demand for minor league players and matches fell, thus the wages instead declined.