Scalping tickets is a great way to see how markets work. For many, going to the game has value, and that value will vary widely. When teams price tickets and don’t sell out it lets us know that they priced tickets too highly. The opposite is true for games that do sell out and more people want to go to the game than tickets available. However, the scalper and ticket buyer truly show how a market (free from price controls) can lead better outcomes. Yet, in many states ticket scalping is either illegal or strictly enforced.

Consider the state of Georgia. Under Georgia state law, it is unlawful to sell a ticket in excess of face value (there are some added caveats as well). Whereas, Alabama allows resell of tickets with the condition that the scalper has paid $100 for a license.

A) Consider that the ticket price set by the team, is not the market clearing price. If the stadium isn’t filled, then the price of the ticket was too _____ and created a _____ in the market.

B) Consider that the ticket price set by the team, is not the market clearing price. If the stadium is full, and more people want to go to the game, then the price of the ticket was too _____ and created a _____ in the market.

C) Explain why, in states where scalping is illegal, ticket scalping is essentially a price ceiling of zero.

D) In a state where scalping is illegal, what creative way could a scalper sell you a ticket for more than the face value of the ticket?

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