Are the Prices at Disneyland Goofy? The Walt Disney Company operates two major theme parks in the United States: Disneyland in Anaheim, California, and Walt Disney World in Orlando, Florida. Each year millions of people visit each park. Regardless of which park you visit, the price you pay for your ticket will depend on how many days you want to spend at the park. For example, Disneyland's website lists prices for one‐ to five‐day tickets. On the day we checked, the various ticket prices were as follows: • One‐day ticket, $63 • Two‐day ticket, $85 • Three‐day ticket, $109 • Four‐day ticket, $129 • Five‐day ticket, $139 Notice that the price of a one‐day ticket ($63), when doubled, is $126. Disneyland does not charge visitors double its one‐day ticket price for visiting two days; it charges $85. Similarly, triple the price of a one‐day ticket would be $189, but Disneyland charges $109 for a three‐day ticket. Disneyland seems to be telling visitors that if they want to visit the theme park for one day, they have to pay $63, but a second day will cost only $22 more, not $63 more. Notice that the price Disneyland charges to stay a fifth day is only $10 more than staying four days. Do you wonder how much Disneyland would charge to stay, say, a tenth day? By the tenth day, it might be that you would only have to pay 25 cents more. Why does Disneyland charge less for the second day than the first day? It's because of the law of diminishing marginal utility, which states that as a person consumes additional units of a good, eventually the utility (satisfaction or happiness) from each additional unit of the good decreases. Disneyland can't charge as high a price when utility is low as when it is high. If you have never been to Disneyland, or haven't been for five years, your first day is likely to be quite enjoyable. If you've already spent, say, two days at Disneyland, your third consecutive day isn't likely to give you as much utility as your first. Questions for Discussion (type your responses – 2 sentences each – and email) 1. Hopefully, the law of diminishing marginal utility sounds vaguely familiar (remember the marshmallow eating experiment last year?). Summarize this law in your own words … 2. Explain why Disneyland prices tickets using the law of diminishing marginal utility? 3. Think about other goods or services that are priced the way visits to Disneyland are priced (for two units of the good or service, you pay less than double what you pay for one unit). Try to provide several examples …