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Question

Qcue is a software-based dynamic pricing management company that has developed software to assist professional and collegiate sports teams in increasing their ticket sales by practicing near-perfect price discrimination. Use the following excerpt from a Forbes article about the company to answer the following questions:

Dynamic pricing will become much more prevalent in both professional and collegiate sports over the next few years. . . . In an industry where the demand across games tends to be dissimilar for a plethora of reasonssome predictable, yet some spuriousit only makes sense that the pricing of sports tickets should allow teams the ability to price their inventory in the most efficient way possible. . . . Accurately pricing tickets is a very difficult process, says Barry Kahn, the CEO of Qcue. In the initial stages, we had both technical and emotional barriers to overcome. We were changing the way things had been done for so many years, moving from pricing tickets 9 months out and keeping them static, to allowing the price to flex right up until the first pitch. That meant educating those in charge of ticketing operations as well as the fans. . . . In 2009, Qcue had one client. In 2010, they were working with three teams. Today their roster includes 30+ teams across MLB, MLS, NHL and NBA.

When teams are able to change ticket prices minute to minute based on demand, they are attempting to

a. discount tickets to their most loyal fans.

b. transfer surplus from consumers to producers.

c. prevent the resale of tickets through ticket reselling websites like StubHub.

d. confuse the fans of their rivals in order to gain a home-field advantage.

e. break down the technical and emotional barriers that exist between fans and team owners.

Answer

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