Market Power

Musings by an academic economist on the power of markets and the power over markets.

Sunday, February 06, 2005

Upward Sloping Demand?

Principles students sometimes get confused when confronted with a situation that seems to violate the "law" of demand: the price of a good is higher but the quantity demanded is also higher. What is much more likely to have happened is an increase in demand. For instance, the University of Missouri's athletic department will charge higher prices for games against teams such as Kansas State, Nebraska, Kansas, Oklahoma and Texas then they will against most non-conference opponents or teams like Iowa State or Baylor. But the games against KSU, NU, KU, OU, and UT will also be more highly-attended. These games are just in higher demand.

For more on demand in sports, I wrote here at The Sports Economist about this very thing.