Do you feel as though every time you go out to eat the bill just keeps getting bigger? If you do, you’re not alone. The cost of food, whether eaten in a restaurant or at home keeps rising, except that is, at the Masters Tournament in Augusta, Georgia. There you can buy a pimento cheese sandwich or an egg salad sandwich for just $1.50! If you’re not really up for pimento cheese or egg salad, no worries, you can also get turkey and cheese for $2.50. How does the Masters, one of the world’s premier sporting events, manage to sell its food at prices that are essentially unchanged since 2002, even as inflation has pushed up prices on food sold virtually everywhere else?

Well tournament officials claim that its all about creating value for the customer and making their day at the golf course a more affordable experience. Sounds great, right? That is until you realize that you’ll probably need to spend several thousand dollars on StubHub to get a resale ticket to get into the tournament to buy your $1.50 sandwich. But don’t blame that on the Masters Tournament. The face value of that ticket might have been just $125-200. So, how did that resale ticket get so expensive? Well, as it turns out, just like everywhere else, the basic concept of supply and demand applies to the Masters, too. Offering tickets at seemingly affordable prices only works if supply and demand are in balance. High demand drives prices up. All of which would suggest that when it’s all said and done, that $1.50 sandwich might not be such a bargain after all.    

Discussion Questions:

  1. Using the law of supply and demand, explain ticket pricing at the Masters Tournament. Then, consider what the concept suggests about food prices at the tournament. How do scarcity and perishability factor into your response?     
  2. Assuming you haven’t decided to spend part of next term’s tuition money on a day on the golf course, reflect on the price of lunch at the Masters relative to the cost of lunch at an event at your university’s stadium or student union. How does it compare? Is your university, like the Masters Tournament, focused on creating value for the customer by offering affordable food? Discuss.