1. When we could actually go to concerts and sporting events, there was a common phenomenon, that the market price for tickets on Stubhub and similar platforms would rise above the listed (box office) ticket price. This is pejoratively known as “scalping”.   Many states have instituted laws against scalping, effectively a price ceiling at the original price of the tickets.

So now the NCAA 2026 water polo championship is being held at UC Irvine.   Tickets are sold for $100, which turns out to be the equilibrium price. Then the Anteaters make the Final Four and demand for tickets skyrockets! But in 2025 California enacted a new law, making scalping completely illegal. If it were not illegal, the market price would be $400, but now the price limit is the original $100

1. 1. Draw the diagram that illustrates what has happened in this market. Illustrate the shortage or surplus that has occurred, the deadweight loss that we can see in the diagram, and discuss the other inefficiencies that have occurred in this market.
2. 2. One argument for scalping laws is that it keeps the tickets in the hands of “ordinary people”—that UCI undergraduates, for example, “should” be able to see the match at the $100 price.    Discuss why this argument in favor of scalping laws is quite false.