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The prices are ultimately set at a certain price to ensure the owners maximize their revenue, regardless of how much they must pay their players (Grabiner). However, sometimes owners do raise prices corresponding to the signing of an expensive, prestigious player. This is due to the assumption by the owner that an increase in the demand for tickets will raise with the new player, allowing them to charge more for the game, not in order to pay the high salary (Hey). Fans try to use high ticket prices as a motive for lower salaries. Yet, they are more than willing to keep on paying as the ticket prices climb. From 1997 to 2000, ticket prices increased along with an increase in attendance (Pappas). The players create a demand that the owners take advantage of by raising prices to maximize income; therefore, the players are justified in receiving the benefits of the owner's profit.

In addition to the fans willingness in the market, the owners also show willingness when they pay baseball players the high salaries. When baseball players enter free agency, all teams are allowed to bid for their services, making it a free market. In a free market, the employer, or owner, is willing and able to set the salary no more than the employee's, or players, contribution to the revenue (Geltmeyer). In other words, if a player contributes ten million dollars to the team's revenue, then the owner will be willing to pay up to, but not more than, this amount. The worth of a single player to his team is known as the marginal revenue product, which is the "amount of revenue the team makes with him but would not make without him" (Grabiner). Owners are in the business of baseball to make a profit; therefore, they would not want to overpay players. If an owner pays more than a player's marginal revenue product too many times, it would lead to a loss. It is in the best interest of owners to make sure salaries are below the contribution of the player in order to make a profit.
Free agency most effectively displays the effect of the free market on salaries. Both the player and the owner have a limit in mind when negotiating a contract. These two limits are the reservation wage and the marginal revenue product (Hey). The player will not agree to a salary below the reservation wage and the owner will not pay more than the marginal revenue product. Thus, the final salary falls in the "contract zone" between these two numbers (Depken 6). Being able to sign a player for less than the marginal

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