Question

There is often only one major league baseball team in a city. What is the consequence of this in terms of ticket prices? a. Ticket prices will be lower because each team is a monopoly in the city. b. Ticket prices will be higher because each team is a monopoly in the city. c. Ticket prices will be lower because each team lacks market power. d. Ticket prices will be higher because each team is faced with strong competition. e. Ticket prices are unaffected by the number of teams in a city.

Answer 1

Answer:

b. Ticket prices will be higher because each team is a monopoly in the city. 

Explanation:

A monopoly is when there is only one firm operating in an industry. Monopoly usually have market power. They have the ability to set market prices. They usually earn economic profit in the long and short run.

Monopolies are not faced with any competition because they are the only firms operating in an industry.

Because there are usually only one major league in each town, the teams are monopolies, they have the ability to set high prices and do not face competition.

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