Beer prices at major league baseball stadiums are usually much higher than prices at a bar or restaurant

Marketing Jan 14, 2021

Beer prices at major league baseball stadiums are usually much higher than prices at a bar or restaurant. This is mainly because:

A) the owners' baseball teams are not profit maximizing.

B) it costs the owners of the baseball teams more money to buy the beer from distributors.

C) demand is much higher at a baseball game than at a bar.

D) baseball team owners have market power and can charge a higher price when they are the only sellers of the beer.

E) the government forces the owners of baseball teams to charge a high price.

Expert Solution

Market power allows baseball team owners to charge higher rates for beer sold in stadiums as compared to restaurant and bar prices (d). They can ensure that supply is limited by restricting drinks from outside and the number of individuals allowed to sell in the stadium, creating a monopoly situation.

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