Reading: Please read the following article from The Wall Street Journal (WSJ): “
Reading: Please read the following article from The Wall Street Journal (WSJ): “How Taylor Swift Fans Broke Economics” (https://www.wsj.com/finance/taylor-swift-tickets-fans-economics-e04f0395?mod=Searchresults_pos5&page=1). Create an account on My Sam for free WSJ access, as detailed in the syllabus instructions.
Prompt: The article notes that despite the skyrocketing prices in the secondary market for Taylor Swift concert tickets—often exceeding eight times their original value—ticket holders remain reluctant to sell. This behavior appears to defy the traditional law of supply. However, the article also suggests that at “some ludicrous price”, ticket holders might ultimately be persuaded to sell.
Tasks:
1) Describe how you would handle this situation (What would you do?) and provide your thoughts on the article’s perspective. If, as the article suggests, there is a certain “ludicrous” price at and beyond which otherwise reluctant ticket holders would sell, explain how the supply curve in the secondary market would look like.
2) write a respond to this following passage.
“Personally speaking I am not a huge fan of Taylor Swift to buy tickets for her concert. I do like some of her song but not all of them to attend. I do realize how big Taylor Swift is and how her music touches so many people that idolize her so much so that they would pay high to attend her concerts and wait in line for the pre-sale or whatever. Thus, I understand how Taylor Swift fans broke economics since the demand for her tickets would be high considering her fan base.
Obviously, the tickets would increase the more the consumers demand it. Those who really want to go will try to purchase the tickets before the ticket prices increase so its more affordable and not sell them. However, there will be people also buying them to sell them at a higher price later on if they are not big fans. In addition, there will also be people who will not be able to attend for other reasons so they will have to sell their tickets.
Overall, initially the supply curve is steep since the majority of the ticket holders will not want to sell leading it to be inelastic. As prices increase, it will reach the “ludicrous price” and more ticket holders will join the market leading it to become elastic supply curve instead.”