Many colleges and universities have popular teams in one sport (usually football or basketball) for which there is a shortage of tickets for the teams’ home games. In response to the shortage, some of the schools require people to make “charitable” contributions to the college or buy seat licenses that allow them to purchase season tickets. Referring to this practice, economist Phil Miller explained that this “is the two-part tariff that is so common in business these days . . . a person pays a flat fee to essentially get the right to buy a product and then has to pay again to buy the product. It’s a way to obtain higher profits.”

a. Why would schools use a two-part tariff rather raising prices to eliminate shortages of tickets for their popular sports teams?

b. Would the use of online brokers (for example, StubHub) that allow buyers of season tickets to resell tickets result in greater economic efficiency in this market? Explain briefly.