If I was the manager of a theme park and the economy is declining and attendance is decreasing, should I lower the prices of tickets or keep them the same?

What would YOU do?? We'll be glad to add our comments to your answer.

Thanks :)

I would lower the price, but I'm working in a group with someone who disagrees and says that the prices should stay the same. I would think that if there is a decrease in attendance, something should be done about it.

As an economist, I would estimate (or predict) what the elasticity of demand for theme park entertainment is. I presume the marginal cost of letting more people into the park has got to be very small. If demand is elastic, then lower away, you will make it up on increased volume.

thanks :)

As the manager of a theme park during an economic decline with decreasing attendance, it can be a challenge to make decisions that will maintain a steady stream of visitors. One option you could consider is lowering the prices of tickets. Lowering ticket prices could potentially attract more visitors by offering a more affordable experience during tough economic times. However, before making a decision, it's important to carefully analyze the situation and consider a few factors:

1. Market Research: Conduct market research to assess the current economic conditions and the pricing strategies of competitors. This will help you understand if lowering prices will align with the market trend and attract a larger share of visitors.

2. Cost Analysis: Evaluate your theme park's operational costs and determine the impact of reducing ticket prices. Ensure that lowering prices will not significantly affect your ability to cover expenses and maintain the quality of the park's facilities and services.

3. Revenue Projections: Forecast the potential increase in attendance if ticket prices are lowered. Calculate the expected number of additional visitors and factor in the reduced ticket revenue to determine if the overall profitability will improve.

4. Value-added Approach: Instead of solely reducing ticket prices, consider offering value-added incentives to entice visitors. This could include discounted food and beverage packages, special promotions for families, or bundled packages that include additional park activities.

5. Marketing and Promotion: Develop a comprehensive marketing and promotion strategy to communicate the new pricing structure and any value-added benefits to potential visitors. This can help create awareness and generate excitement about the park, potentially driving increased attendance.

In the end, the decision to lower ticket prices or keep them the same will depend on the specific circumstances of your theme park and your understanding of the market. Carefully analyzing all the factors mentioned above will help you make an informed decision that maximizes attendance and maintains profitability in a challenging economic environment.