South-Western EconNews: Disequilibrium at Disney

Disequilibrium at Disney

Subject

Shortages and rationing

Topic

Equilibrium

Key Words

Lines, Wait, Prices

News Story

The number one complaint at theme parks is long lines at the most popular attractions. On busy days, visitors can wait two hours in line. The problem is particularly acute where attractions are new-like Epcot's new thrill ride, Test Track.

Disney has been experimenting with timed tickets whereby visitors insert their park passes into a machine that prints the time at which they will be admitted in a reservations-only line. Other similar notions include a beeper system to summon visitors who have reservations. Sea World in Orlando will become reservations-only in 2000. Another idea is to increase park admission prices so high that attendance will be choked off.

At present, it is possible to jump to the front of the line at Universal Studios theme parks if you buy a VIP tour for $110 per person for five hours. At Disney, if you stay in an on-property hotel, you can be admitted earlier than other visitors.

(Updated June 1, 1999)

Questions

1.	Draw a supply and demand diagram for the Test Track ride. Assume that the demand is high but the daily number of rides is relatively low and fixed.
	a) After entering Epcot, what is the monetary price of the ride? Draw the price line.
	b) Is there a shortage or a surplus of rides? Explain and illustrate on your diagram.
	c) Why are people willing to wait in line for the ride? Answer in terms of your diagram.
2.	Timed ticketing is being tried by Disney.
	a) Does this eliminate the shortage? Explain.
	b) What is the advantage?
3.	One option is for Disney to increase the general admission fee for Epcot.
	a) Would this eliminate the shortage? Explain.
	b) What would be the advantage?
	c) What would be the disadvantages for visitors and Disney?
4.	VIP packages, like at Universal, would be another option.
	a) Would these eliminate the shortage? Explain.
	b) What would be the advantage?
5.	Can you think of another solution which would eliminate the shortage and therefore avoid lines and disappointed visitors?

Source

Jayne Clark, "Limiting long waits is the bottom line at theme parks", USA Today, April 16, 1999.