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
 Scarcity:
 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
 Example:
 Choosing to watch a football game on TV instead
of going to the game.
 What is the Opportunity Cost?
Trade-offs
 Trade-offs:
 sacrifice one thing to obtain another
 Example:
 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:
 The amount of goods
producers are able to
make and sell
 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
 Supply High
 Demand High
 Demand Low
 Price High
 Price Low
Economic Impact Activity
 See Economic Impact PowerPoint