I went home for the night and was planning on submitting this at home. My dad's internet wasn't working so I went back to college to submit it here. Sorry it's late:
The first thing I noticed in Adler’s Article on Bethpage Gray was how economically unfeasible the entire situation seemed for everyone except for the NY Golf Shuttle company. First, let’s start with Bethpage, who has tee-time price so low that the demand makes them run out of spots within minutes of opening. This is economically unfeasible, for they are not correctly in the best amount of profit due to the shortage of spots that the market would allow. Also, many officials talk about how this company is possibly doing something illegal, when all it is doing is profiting off the high demand for golf at the high class Black Course (and probably other golf courses around the area by this point 2 ½ years later. The final thing I’ll mention was the guy who said that NY Golf Shuttle was “unfairly charging” their clients by doing this service and charging them too much. The simple reply to that is, if it’s too high, then why do people still flock to them in order to get tee times and the service at prices up of to $850.
My first question comes from a comment made in the previous paragraph: why on Earth does Bethpage not either expand or raise its prices? When they have such high demand, wouldn’t those be highly feasible options?
The next major discussion question pertains to economic law: when situations like this arise where a company is supposedly milking clients who want an incredibly scarce item, is it better for the government to interfere in the market and stop the company or to create additional incentive for there to be more of the item in the market?
My final question relates to the idea behind NY Golf Shuttle, and for that matter also Bethpage’s Black Course: why is there only one of them? If this is such a profitable industry that has been around for a while, why aren’t there any competitors taking advantage of this market situation?
The entire economic idea behind Bethpage Gray’s profitable and demanded golf course is quite intriguing and directly relates to what we learned in class in Week 13. When prices are like a price ceiling and are far lower than the economical equilibrium, it will create a shortage of the good, for it will attract more people that value the good at less than the equilibrium price would be. Bethpage Gray would be smart to increase its prices, for the quantity demanded will eventually equal the quantity supplied as the price increases, bringing in more profit for Bethpage Gray while diverting the clients who do not wish to pay the higher price to other companies that could profit from it, though not as much as Bethpage. It would be interesting to see a company that operates as the total opposite of Bethpage economically (having a price that’s way higher than market equilibrium), though this is probably not going to be possible because it would not be as economically viable.
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