Tickets to the National Football League’s (NFL’s) championship game, the Super Bowl, are sold by the League at a below- market- clearing price. This policy produces a short-age. To allocate the relatively scarce tickets, the NFL typically employs a nonprice rationing scheme. For example, during a recent season, the League allowed all interested buyers to submit an application for up to two Super Bowl tickets. The NFL then conducted a lottery to determine which of the submitted applications would be honored. Explain why the nonprice rationing scheme employed by the NFL results in an inefficient distribution of goods. Can the NFL’s insistence that the state in which the Super Bowl is played prohibit ticket scalping be justified on efficiency or equity grounds? Explain.
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