PERLS104 Chapter Notes - Chapter 13: Reserve Clause, Monopsony, Joint Venture

• School: University of Alberta
• Department: Physical Education, Recreation and Leisure Studies
• Course: PERLS104
• Professor: Jay Scherer

Document Summary

Fa(cid:374)s relate to tea(cid:373) as (cid:862)ours(cid:863) as if the(cid:455) o(cid:449)(cid:374) the tea(cid:373) a(cid:374)d hea(cid:448)il(cid:455) (cid:272)ele(cid:271)rate a tea(cid:373)"s (cid:448)i(cid:272)tor(cid:455) as if it was their own victory. Leagues are cartels and monopolies; any competitors are incorporated via mergers/expansions. **skipped descriptions of each league does(cid:374)"t see(cid:373) i(cid:373)porta(cid:374)t to the (cid:272)ourse. Cartels: group of two or more firms that formally agree to coordinate their production and pricing decisions to maximize joint profits allows group of firms to exercise monopoly power, monopoly status reached in four ways. Leagues in north america have territorial agreements that divide us and canada into well defined areas where each team can act as monopolist. Restrict output quantity and increase prices to earn higher profits. Limited number of franchises and limited length of season. This is achieved through blocking entrants and extracting rents from those wishing to enter. In competitive markets, you lower prices and increase supply for higher profit.