Chapter 4, Problem 11P

To determine

a.

The equilibrium price, quantity and shortage of the concert tickets.

Introduction: Demand refers to the total want or the quantity needed of a type of good in an economy in a given period of time.

Supply refers to the total quantity that the producer delivers in the market for sale in an economy in the given period of time.

Shortage is the difference between the supply of goods with their demand and the excess of demand for a commodity in the market over its supply at a given level of price.

To determine

b.

The consumer surplus, producer surplus and total surplus.

Introduction: Producer surplus refer to the excess of benefit over the normal profit that the producers gain the market place. It is calculated by the difference of the price of good the producer sell at and the lowest price at which the producer could sell the good.

Consumer surplus refer to the benefit that the consumer get from the purchase the goods from the market. It is calculated with the difference between the price at which the consumer purchases the goods from the market and the highest price consumer could pay to purchase the same product.

Total surplus is the sum of total consumer as well as the producer surplus in an economy.

To determine

c.

The effect on consumer surplus from the resale of the tickets on the secondary sites.

Introduction: Price discrimination refers to the process in which difference prices for the same quality and quantity of good is charged from different set of individuals in order to earn extra profit from the sales.