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The diagram below represents the supply of seats for the Rihanna concert in the O2 Stadium - Leaving Cert Economics - Question b - 2010
Question b
The diagram below represents the supply of seats for the Rihanna concert in the O2 Stadium. After the tickets for the concert are sold a 'black market' may develop f... show full transcript
Worked Solution & Example Answer:The diagram below represents the supply of seats for the Rihanna concert in the O2 Stadium - Leaving Cert Economics - Question b - 2010
Step 1
Explain the underlined term.
Answer
A black market is an unofficial or illegal market where goods or services are traded without government regulation or oversight. In the context of the concert tickets, it implies selling tickets that are not authorized or sanctioned by the concert organizers, often at inflated prices.
Step 2
Explain the relationship between the price of tickets and the supply of seats, as shown in the diagram.
Answer
The relationship illustrated in the diagram demonstrates that when the price of tickets is fixed and does not increase despite high demand, the supply of seats will remain constant. This can lead to a shortage if demand exceeds supply at that price level, thus potentially creating a black market where tickets are sold at higher prices.
Step 3
Discuss two effects for potential ticket buyers if a 'black market' develops for the tickets.
Answer
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Higher Prices: Potential ticket buyers might find themselves paying significantly more than the face value of the tickets, as sellers in the black market take advantage of the scarcity of tickets.
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Risk of Counterfeit Tickets: Buyers who turn to the black market may face the risk of purchasing counterfeit tickets, leading to potential denial of entry into the concert if the tickets are fake.