Thursday, October 20, 2011

Rangers Demand Shift

As the Texas Rangers enter the World Series, demand for the team's tickets increase.
"Rangers managing partner and CEO Chuck Greenberg told reporters that the bulk of the increase would be felt in premium seats and that some seats in more affordable areas would remain the same or even drop."
As the demand increases you would think that the management team for the Rangers would increase the prices of all the seats in order to make a larger profit.
There is an excess demand causing disequilibrium in this particular shift. They can't produce more seating in the stadium. Increasing prices for the premium seats pushes back to equilibrium. A secondary market would come into play if there was no increase in price for seats. Scalpers would purchase and re-sell them for a greater price.
By the team strategically planning their pricing it creates tougher competition for other teams.

5 comments:

Wei said...

Not only the demand of the tickets goes up in World Series, the popularity of it goes up as well. People love to watch the playoffs, even more when it’s a championship like World Series. Having the tickets sold out is good for the team. Also, regardless the price for ticket, those teams made into playoffs will earn more money than those who didn’t. Rangers also have products related to ALCS when they won the championship. As Rangers is one more game behind from winning the World Series. Rangers’ fans are ready to buy those Rangers’ champion caps, shirts or any related products. Winning the World Series is just best of the players or team. It also will make the Arlington area economy goes up. Because more tourists will make the visit where the champs practice and play at home.

Anonymous said...

The Rangers entering the World Series has increased the price and demand for the tickets. If the Rangers win the World Series, I do agree that the Rangers would benefit greatly by keeping the price of the tickets the same or lowering them during the regular season. It would indeed cause a shift in demand because more people would be willing to go to the games if the price of tickets stay the same as they were before the postseason or decrease. The Rangers have a big opportunity to make a greater profit and to increase demand for the sport of baseball and their team.

Emily

Mercedez Spears said...

Regardless of the demand for tickets, the World Series is generating revenue and keeping people working. (http://theoutfield.wordpress.com/2011/10/22/world-series-economic-impact-on-st-louis-an-interesting-article/) More money is brought into Arlington and St.Louis now because of baseball. Fans following their team stay in hotels, spend money in sports bars and on retail products. The employees working in the concessions and at the windows only have these jobs as long as the teams are playing. The World Series is not only for entertainment but for greater economic impact for homes of the teams.

Mercedez Spears said...

It would be hard for the Rangers to achieve maximum profit if prices didn't increase somewhat. As demand rises the equilibrium price is going to increase as well. When prices increase people will then have to make their decisions based off their elasticity.

I edited my post Emily hopefully it will help everyones understanding I know these comments have been helpful to my understanding.

Madison V said...

I agree with the Rangers approach to ticket pricing for next season, but I do think that the organization has it's fans in mind when making these decisions. After two successful years in the playoffs, brokers and even individuals will be buying Rangers tickets at will to resell them on sites like StubHub or Ticketmaster. Because the demand for Rangers tickets is up, they know that regardless of pricing, the hype will get people out to the stadium next year. With extra attendance, the Rangers will be making money from other sources like concessions, or merchandise sales, which I think plays a factor in their decision to keep ticket prices the same.