Chapter 31 - Assignment 2: Should All Baseball Teams be Competitive?

Read John J. Siegfried's article on "Sports Player Drafts and Reserve Systems."

  1. Explain how the combination of a player draft and a reserve system can create a monopsony labor market.
  2. Does Siegfried suggest that the reserve system will result in "competitive balance?" Why or why not?
  3. Does Siegfried argue that "balanced" teams are efficient from an economic perspective? Explain.
  4. Carefully explain the determinants of a player's marginal revenue product for a particular team.
  5. Why might the marginal revenue product of a high-quality player be higher in some markets than in others?
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