Question

3. A ticket scalping law prohibits selling tickets to an event for an amount above the price on the face of the ticket. What would be the economic term for this law?   What is its effect on the economics of the ticket market for an event like the Super Bowl?

Answer 1

Economic term: Regulation

This is called regulation on scalping. Selling ticket at a price above the face price is scalping; it happens in the reselling market; since it is restricted by the law, the market is regulated by the government.

This is one of the most popular games in the country. The demand of ticket is very high among the audiences. Since there is no scalping because of regulation, there should not be any black market or reselling market; all the tickets must be sold as per the price of those tickets – nothing less nothing more. Since the price is known, the demand of ticket becomes perfectly elastic. Since there is the limit of capacity of audience in the stadium and price has no influence, the supply becomes perfectly inelastic.