Book contents
- Frontmatter
- Contents
- List of figures and tables
- Preface
- Part I The arts sector: Size, growth, and audiences
- Part II The microeconomics of demand and supply
- 4 Consumer demand: An introduction
- 5 The characteristics of arts demand and their policy implications
- 6 Production in the performing arts
- 7 Firms and markets in the performing arts
- 8 Productivity lag and the financial problem of the arts
- Part III The fine arts and museums
- Part IV Public policy toward the arts
- Part V Art, economy, and society
- Index
7 - Firms and markets in the performing arts
Published online by Cambridge University Press: 05 September 2012
- Frontmatter
- Contents
- List of figures and tables
- Preface
- Part I The arts sector: Size, growth, and audiences
- Part II The microeconomics of demand and supply
- 4 Consumer demand: An introduction
- 5 The characteristics of arts demand and their policy implications
- 6 Production in the performing arts
- 7 Firms and markets in the performing arts
- 8 Productivity lag and the financial problem of the arts
- Part III The fine arts and museums
- Part IV Public policy toward the arts
- Part V Art, economy, and society
- Index
Summary
In this chapter we investigate the economic choices – especially the price-output choices – made by performing arts firms. These choices are largely determined by the following factors:
The level and character of consumer demand for the firm's output
The method and cost of producing that output
The type of market in which the firm operates
The firm's artistic and financial objectives
The availability of government subsidies or of private donational support
Consumer demand was analyzed in Chapters 4 and 5 and production and cost in Chapter 6. We begin this chapter with a discussion of market types and how they influence the behavior of performing arts firms.
TYPES OF MARKETS
Conventional economic analysis recognizes four types of market structure, distinguished from one another by the size and number of suppliers and by whether the goods sold are homogeneous or differentiated. Homogeneous goods are products such as wheat, steel, or potatoes, which are graded and standardized so effectively that buyers do not care which supplier they deal with for any given grade. Products are said to be differentiated if the unique features of style, quality, design, or brand name are sufficient to convince buyers that sellers are not offering virtually identical goods. Examples of differentiated products are automobiles, magazines, toothpastes, and theatrical productions.
Perfect competition
Perfect competition exists when there is a large number of sellers of a homogeneous product, and no one seller is large enough in relation to the size of the market to influence the market price.
- Type
- Chapter
- Information
- The Economics of Art and Culture , pp. 116 - 136Publisher: Cambridge University PressPrint publication year: 2001