Thursday, January 03, 2008

Ticket prices and falling demand

One of the problems students have with demand is understanding the difference between a decrease in DEMAND and a decrease in the QUANTITY DEMANDED. Part of the problem is that supply interacts with demand to set a market clearing price. When the supply of a good or service is fixed, it's a bit simpler. That happens to be the case with Fiesta Bowl tickets.

Kim Bianchi came to the Valley for the Insight Bowl. She ended up staying for Wednesday's Fiesta Bowl, thanks to tickets being sold at bargain-basement prices.

Outside the Glendale stadium, the Chicago woman and a friend scored seats just 35 rows from the action for $35 apiece.

The face value was $218.

Here we have a clear indication of a decrease in demand. The total quantity of tickets didn't change, but the price certainly did.

Note that the story lists two possible reasons for the decrease in demand - a possible change in consumers' incomes and a change in preferences.

Some ticket brokers attributed the abundance of tickets still available on game day to a shaky economy, while others said it had more to do with an uninspiring match up between Oklahoma and West Virginia.

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