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People are very concerned with the rise in prices. Sometimes it is difficult to control this rise and goods that were cheap yesterday may be expensive today. The rise of prices influences all economic spheres and there are certain factors that cause it.
This rise also influences the prices of tickets for Broadway Shows. The tickets have risen 31 percent since 1998. According to Hal R. Varian, there are certain dynamics of pricing tickets for Broadway Shows. The rise in prices may be caused by a great number of discounts. It should be noted that people attending Broadway Shows belong to different social classes and have different salaries. There are rich people who buy the tickets whether they cost $30 or 60$. Their visit of the show does not depend on its price. They buy expensive tickets not to queue up for the cheaper ones. There are also poor students and unemployed people who cannot afford themselves such expensive tickets and they use different discounts provided for these groups of people. It should be taken into account that tickets in a theater-like the tickets on a plane are highly perishable as far as there are not two opportunities to sell these tickets. If the tickets are not sold they cost nothing.
Sports tickets have nearly the same situation. According to Charles Stein when the supply is limited and demand increases the prices rise and people are ready to pay more than these tickets really cost. The process of reselling tickets is known as SCALPING. People who want to watch the game do not regret their money and they are ready to buy sports tickets at any price. Some people make a business from scalping. They buy tickets beforehand and sell them more expensive. In this case, the prices for the tickets cannot be controlled. This process is known as PRICE DISCRIMINATION.
Sometimes, the rise of prices is caused by MONOPOLISTIC COMPETITION. Jeff Jacoby provides a good example connecting with the prices for bottled water. When tap water has become undrinkable people begin to buy bottled water. In the situation of MONOPOLY, when there is only one vendor who has stable MONOPOLYS PROFITS the prices are unchanged. With the occurrence of another vendor who increases the price for the water wanting to have more profits, the first vendor also has to increase the price and as a result, the prices rise as a result of MONOPOLISTIC COMPETITION. There is a certain rule in the rise of prices. When demand intensifies, the prices rise and as prices rise suppliers work harder to meet demand. For example, some hotels used the situation to make money when people whose houses were destroyed with Hurricane Charley needed a place for overnight stay. Taking into account that these people need shelter and they were ready to pay the last money hotels increased the prices for rooms. As a result, these hotels were blamed in price gauging.
There are certain rules that control such situations at the market. This means of control is called PRICE CONTROL. Nevertheless, these means of control may hamper economic development. For example, an anti-gauging law in North Carolina considers it illegal to sell goods at a price that is unreasonably excessive under the circumstances . This law limits price rise but it makes it unprofitable for other countries to sell goods to North Carolina.
From the above said we may conclude that there are different factors that cause the rise of prices. Sometimes the rise of prices is justified and sometimes it is illegal but people use different means to make money and even the grief of other people does not stop them.
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