Supply and Demand - 989 Words

Supply and Demand: Vacation to a theme park The supply and demand of goods and services vary due to various factors. This paper will discuss the supply and demand of vacation to a theme park and the various factors which affect them. First, there are many reasons why people wish to go on a vacation to a theme park. The many reasons include the fun and entertainment which can be experienced at the theme parks and also the family bonds that can be formed at the theme parks. Price is definitely a factor for people when making a decision to have a vacation at a theme park. In line with the law of demand, when prices are high, people will be less able and willing to spend on a vacation to a theme park. On the other hand, when prices are low,†¦show more content†¦Vacation to a theme park can be complemented by various goods and services. One of which will be air tickets. For example, when prices of air tickets fall, demand for air tickets will increase. In addition, people will be more attracted to flying to the theme park to spend a vacation there. Similarly, another complement good is hotels. When hotel rates fall, people are more able and willing to live in a hotel and thus will be able to afford to stay in the hotels in or near the theme park. Given that a vacation to a theme park is more of a luxury good and not a necessity, people will not spend their money on it unless they have extra disposable income or high purchasing power for they would rather use the money on basic necessities first. As such, demand for a vacation at a theme park is highly price elastic. This means that when prices increase, demand for the product will decrease more than proportionately and the organization will experience a decline in profits. On the other hand, when prices decreases, demand for the product will increase more than proportionately and the organization will experience an increase in profits. As such, theme park organizations need to be very careful about their pricing strategies for they can result in drastic effects on total revenue and profits which the organization can earn. In conclusion, there are various factors which affect the supply and demand of vacation to a theme park such as prices of substitutes, costs ofShow MoreRelatedSupply And Demand Of Demand1442 Words   |  6 Pages Supply and Demand Kimberly Jo DeVoy Western Governor’s University â€Æ' Supply and Demand A. Elasticity of demand represented as â€Å"Ed† is defined as a â€Å"measure of the response of a consumer to a change in price on the quantity demanded of a good† (McConnell, 2012). 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