Finance and the Economy · Seminar 3 · Elasticity
Supply is vertical at the arena capacity. When demand surges from D₁ to D₂, the promoter can hold the £148 face value or let the price rise. Shift demand and set the price to see who captures the surplus. Question 8, adapted from Sloman, Garratt, Guest & Jones and the 2024 news coverage.
Consumer surplus
Excess demand
Promoter revenue
Reading
Two readings. Economists such as Simon French argue prices are signals: a market-clearing price rations seats to those who value them most and removes the gap that touts exploit. Politicians argue that excluding ordinary fans on price alone is unfair, and that the real issue is the resale market. Both agree that pricing £148 with 14 million people chasing 1.5 million tickets created the queue in the first place.
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