Essays on Price Determination and Perfect Market Competition Case Study

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The paper 'Price Determination and Perfect Market Competition' is a great example of a Macro and Microeconomics Case Study. In the past view decades, the black market has been and remained a big challenge for many businesses especially those that are engaged in manufacturing activities. The black market has affected many economic sectors through the duplication of goods by unregistered or illegalized companies. The intention of the black market is practiced by certain individuals either from the inside or externally with the aim of making quick profits. This is because goods are produced and smuggled into the market even though they are not original or do have the original brand (Ayers and Collinge 2005).

An example is in the electronic industry whereby different electronic goods are produced and sold with certain brand names like Sony even though they do not belong to the company. To sort out the problem has been difficult because of the advancement in technology which has allowed easy duplication of seals which look similar to the original ones. Refer to appendix 1. At the market place, the black market also comes into existence as a result of market dominance or monopolistic competition where one company fully controls and enjoys the benefits within an industry.

In a monopolistic environment, it is very possible for a company to make abnormal profits. This is what motivates individuals to engage in black market deals in order to make quick profits from their deals (Ayers and Collinge 2005). Gain to the ticket touts and loss to the event organizersTicket touting in an event affects two main economic factors namely price and demand. Let’ s take the example of big sports events like the UEFA Cup Final.

In an event like this one, the organizers may plan to produce approximately 60,000 tickets for the fans. In this case touting may take two forms. one, the touts may decide to buy more than one ticket in order to resale to the funs at a much higher price, or duplicate the tickets and produce their own tickets which look similar to the original ones and then sell them direct to the fans. Ticket touting in major events like sporting activities, presentations by renowned musicians, or in concert theatres is very common (Case and Fair 2004).

The best case of ticket touting is the one that involved a Blackburn fan buying Manchester united tickets in 2008 (Sam, 2009).

References

Ayers, R & Collinge, R 2005, Microeconomics: Explore and Apply, Upper Saddle

River, Pearson Prentice Hall.

Baumol, W & Blinder, A 2005, Microeconomics: Principles and Policy, 9th ed.

Mason, OH., Thomson South-Western.

Case, K & Fair, C 2004, Principles of Microeconomics, 7th ed. Upper Saddle River,

NJ, Pearson Prentice Hall.

Gwartney, J., Stroup, R., Sobel, R & Macpherson, D 2006, Microeconomics:

Private and Public Choice, 11th ed. Mason, OH, Thomson South-Western.

Hall, R. & Lieberman, M. (2005). Microeconomics: Principles and Applications, 3rd

ed. Mason, OH: Thomson South-Western.

Krugman, P. & Wells, R 2005, Microeconomics, New York, Worth Publishers.

Mankiw, N 2004, Principles of Microeconomics, 3rd ed. Mason, OH., Thomson

South-Western.

O’Sullivan, A & Sheffrin, S 2003, Microeconomics: Principles and Tools. Upper

Saddle River, NJ., Prentice Hall.

Sam, C 2009, £14k ‘Mr Manchester United’ ticket tout from Blackburn jailed, viewed 2 March 2012 from, http://www.lancashiretelegraph.co.uk/news/blackburn/4660551.__14k__Mr_Manchester _United__ticket_tout_from_Blackburn_jailed/

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