Chapter 4, Problem 11P

To determine

To Demonstrate:

On December 17^th, 2015 tickets for Adele’s highly anticipated U.S concert tour went on sale at ticket-master on a first come. First served basis. Throughout the day, a record 10 million people tried to purchase the 750,000 tickets available. In an attempt to prevent ticket scalping, Adele and Ticketmaster limited buyers to four tickets per concert and require that premium seat holders present the credit card used to purchase tickets to get into the concert. Despite these attempts to restrict resale, tickets on secondary Sites like Stub-Hub were selling for ten times their face value.

1. Diagrammatically, the supply-demand situation for the tickets of the music concert, the equilibrium price, output and the shortage. (Assume all tickets cost $150)
2. The consumer and producer surplus.
3. Explain how reselling tickets on secondary sites can increase consumer surplus.

Concept Introduction:

Consumer Surplus:

The difference between the price that the consumers are willing to pay for a unit of a product and the price they actually pay.