Economics of the Sports Industry

What Is Economics? Economics: The study of the choices and decisions that affect making, distributing, and using goods and services

Scarcity & Opportunity Cost Economic problem of people having unlimited wants and needs with limited resources Opportunity Cost: The cost of passing up the next best choice when making a decision

Opportunity Cost Example Choosing to watch a football game on TV instead of going to the game. What is the Opportunity Cost?

Trade-offs Trade-offs: Example: sacrifice one thing to obtain another You only have enough cash to buy a bike or a snowboard, but not both

Incentives Incentives: Any factor (financial or non-financial) that enables or motivates a particular course of action You must give the consumer incentives because without them, they would have no reason to do what you ask

Supply and Demand Supply = Demand Equilibrium: Supply: Demand: The amount of goods producers are able to make and sell Demand: The amount of goods customers are willing and able to buy Equilibrium: Supply = Demand

Law of Supply & Demand Supply Equilibrium Demand

Shortage and Surplus Shortage: Surplus: Supply Low Demand High Price High Surplus: Supply High Demand Low Price Low

Economic Impact Activity See Economic Impact PowerPoint