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People often blame the high prices for events such as professional football and basketball and baseball games on the high salaries of professional athletes. Assuming one of these teams is a monopoly, use the model to refute this argument.
Ответы
Ответ:
Blaming high ticket prices on the high salaries of professional athletes oversimplifies the situation. In a monopoly scenario, the pricing is not solely determined by the cost of athlete salaries but is influenced by the team's market power and demand elasticity.
In a monopoly, the team has significant control over pricing as it is the sole provider of its specific entertainment product. The team will set prices based on maximizing its profit, considering factors like demand for tickets and associated goods, operating costs, and the team's market dominance.
High athlete salaries are just one component of a team's overall costs. The primary factor influencing ticket prices in a monopoly is the team's ability to extract maximum revenue from its fan base, which is often determined by factors like fan loyalty, overall demand for the team, and the uniqueness of the entertainment product.
Therefore, refuting the argument involves recognizing that high ticket prices are driven by the team's monopoly power and its ability to set prices based on the demand for its unique entertainment rather than solely attributing it to athlete salaries.