Why are the prices for concessions at the games quite high compared to prices for the same or similar items at the local convenience store?

Price Discrimination at the Ballpark Professional baseball teams earn substantial revenues through t Show more Price Discrimination at the Ballpark Professional baseball teams earn substantial revenues through ticket sales. To maximize profit they offer significantly lower ticket prices for children (whose demand is elastic) than those for adults (whose demand is inelastic). This discount may be as much as 50 percent. If this type of price discrimination increases revenue and profit why dont teams also pricediscriminate at the concession stands? Why dont they offer halfprice hot dogs soft drinks peanuts and Cracker Jack to children? The answer involves the three requirements for successful price discrimination. All three requirements are met for game tickets: (1) The team has monopoly power; (2) it can segregate ticket buyers by age group each group having a different elasticity of demand; and (3) children cannot resell their discounted tickets to adults. Its a different situation at the concession stands. Specifically the third condition is not met. If the team had dual prices it could not prevent the exchange or resale of the concession goods from children to adults. Many adults would send children to buy food and soft drinks for them: Heres some money Billy. Go buy 10 hot dogs for all of us. In this case price discrimination would reduce not increase team profit. Thus children and adults are charged the same high prices at the concession stands. Question: Why are the prices for concessions at the games quite high compared to prices for the same or similar items at the local convenience store? Show less

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