Zach Holland Sport Finance 1/29/12 Unit 3 How do professional sports leagues use the concept of demand, scarcity when locating franchises? • Demand is the quantity of a product or service desired by consumers. When planning an event the franchise must consider the anticipated customer demand to determine the price to charge for passes. A team like the Tampa Bay Rays uses the fact that large cities like Portland as a bargaining point for the construction of new facilities. • Scarcity describes the situation when the availability of a resource does not meet current demand. When planning events at new locations a franchise must consider how many passes to be sold. A league will create scarcity on purpose by not expanding into every metropolitan area. Leagues have established internal rules to restrict franchise movement in an effort to maintain scarcity. What are Macroeconomics and Microeconomics? How does sport industry fit into this? • Macroeconomics- the study of forces that affect numerous or even all sectors of
This is the end of the preview.
access the rest of the document.