Monopolies
This describes when a single company dominates a market, limiting competition and controlling prices - often leading to higher costs and less choice for consumers. Most importantly, this practice is illegal in the market.
The difference between what consumers are willing to pay for a product and what they actually pay. It represents the extra benefit or satisfaction consumers get from paying less than their maximum willingness.
What is consumer surplus?
The merger between these two companies caused the FTC to sue them, on the basis on monopolistic actions.
Who are Ticketmaster and Live Nation?
Ticketmaster now controls 80%+ of primary concert ticketing in major U.S. venues because of the purchase of competition by way of this integration system.
What is vertical integration?
Some consumers lose their surplus entirely - they pay too much or cannot afford tickets at all. Many lost access entirely due to inflated resale prices causing THIS to happen.
What is deadweight loss?
These aim to protect consumer welfare and maintain fair competition.
What are Antitrust Laws?
This microeconomics concept explains how a monopoly can set prices and fees unilaterally without fear of losing customers as consumers will pay regardless of the price.
What is inelastic demand?
This inflated producer surplus came directly from money that would have remained with consumers.
What is the shift on the supply and demand curve of the change from consumer surplus to producer surplus?
This is the goal of the FTC in regard to Ticketmaster and Live Nation's actions.
What is protecting consumers?
Fans pay more, small venues and artists lose bargaining power, and the overall market becomes less efficient.
What is the economic impact on the market of monopolies?
As a result of this action and the decrease of consumer surplus and increase in producer surplus, fewer people attend concerts, total welfare falls, and society loses value.
What is inefficiency?
The reason the merger between Ticketmaster and Live Nation was a problem is due to the fact that it violates this specific act.
What is the Clayton Anti-trust Act (1914)?
The company’s power lets it coordinate with brokers, worsening scarcity and inflating resale prices.
What is the problem with monopolies?
This gap was caused by price manipulation.
What is the gap between what consumers were willing to pay and what they actually paid as a result of the high ticket pricing set by Ticketmaster?
These are very hard to prove, causing a problem for future cases and complaints of this kind.
What are cases in regard to anti-trust laws?