Question 4

Your friend is an avid fan of the music superstar Lady Gaga (or your favorite musician). She has recently complained about the high price of tickets to Lady Gaga concerts. She says: "I just cannot afford to pay $100 for a concert anymore. I think ticket prices for Lady Gaga concerts are just too high". Use supply and demand concepts to answer the questions below

1. Given that Lady Gaga has sold all of the tickets in all of her concerts, how would you evaluate your friend's comment that ticket prices "are just too high". Explain.
2. Suppose prices of tickets were lowered from $100 to $75. In what sense, is a price of $75 too low? Explain
3. Suppose Lady Gaga's next CD got very poor reviews and did not sell well. What do you think would happen to the price of tickets for Lady Gaga's concerts? Explain why.
4. Suppose Lady Gaga announced that she was not going to give any more concerts and that her next tour was going to be her last. What do you think would happen to the price of tickets for Lady Gaga's last concert? Explain why.