Supply and Demand Essay
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…
Lastly, the availability of substitutes and price of substitutes also affect demand of the product. When prices of substitutes decrease, consumers will opt for the substitutes in place of the vacation at the theme park. As such, demand will fall. On the other hand, when prices of substitutes increase, demand for vacation at the theme park will increase for consumers will opt for the vacation at the theme park in place of the substitute. Two examples of substitutes for vacation at the theme park will include an overseas vacation or a vacation at a beach resort.
In terms of supply, one of the factors involved will be cost of inputs. For example, when prices of metal are high, firms will be less able and willing to construct theme parks and this will reduce supply of theme parks. Another factor which can affect supply will be competition and prices of competitive goods. If organizations feel that they will be unable to compete with fellow competitors in terms of prices and types of services such as rides, they will be less willing to build the theme park for they recognize the high risks and possible economic losses