The University of Oregon employs a tiered-pricing system when choosing the face
ID: 1132026 • Letter: T
Question
The University of Oregon employs a tiered-pricing system when choosing the face value of a ticket to a Ducks football game. That is, the price for the same seat in the stadium varies based on when the game is played and who the opponent is. For example, according to Ticketmaster, in 2018 a row 20 ticket in Autzen Stadium costs: $10 for the Portland State game . $83 for the Washington game a) What type of price discrimination is this? Explain- I'm looking for more than just a b) Discuss how this tiered pricing system affects the profit received by the University of c) What are the welfare effects on consumers? Break it down into 2 categories: hardcore $53 for the Standford game vocabulary word here. Oregon's athletic department compared to a uniform-pricing system. football fans and casual fans.Explanation / Answer
a) Third degree price discrimination because customers who cannot afford to purchase tickets due to their low income get tempted by the pricing and as a result the company makes profit.
b) Tiered pricing system means charging different prices for the same product or service .Tiered pricing will help the university to make more money because this will tempt customers and uniform pricing may not attract customers. In tiered pricing many new customers join who later on decide to move to higher price tickets.People are attracted by the choices they can make and the value of the product.The stadium gives choice and the people decide to buy tickets based on the value that they get from it. With tier pricing people can make choices according to their budget which is absent in single pricing.Peoplle also value the experience that they get, and try to get quality experience from the game that they watch.
c) Hardcore football fans would never like to interchange football with any other sport .At the same time they have emotional connection with their team . This influences how they respond to changes in ticket pricing.Demand here is price inelastic. Hardcore football fans even mortgage their houses to buy football tickets. However if they purchase at low prices they will feel the pinch less on their budget. Casual fans on the other hand have price elastic demand.
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