More Technology = Less Supply?

Written By: Luke Keoshkerian

http://www.latimes.com/business/la-fi-theme-park-prices-20170306-story.html

The price of admission at theme parks such as Disneyland and Universal Studios have gradually increased over the last 10 years.  The prices of admission have increased faster than almost all other forms of entertainment in Los Angeles, such as Lakers seats and American concert tours.  The price of admission at Disneyland is $110, which is an increase of 67% since 2007.  Disneyland has made very large investments into technological rides at Disneyland, which don’t decrease the price of production, but rather increase demand for the product.  Therefore, supply has decreased, due to the cost of production and the increase in technology.  There has also been a simultaneous increase in demand.  “Disneyland attracted an estimated 18.3 million visitors in 2015, up 23% from 2007.”  Apart from the increase in the increase in consumer taste, the increase in demand could also be attributed to the fact that over time, the population in America and the rest of the world has grown, so the number of buyers has also increased. Therefore, there has been a decrease in supply as well as an increase in demand, which has resulted in an equilibrium point in which supply and demand have both increased.

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