Optimal Short-run Pricing Policies for a Public Campground

Abstract

Limited (short-run) supplies of public campground facilities may be allocated on the basis of price or nonprice rationing procedures. The presumption that the demand for campsites is extremely inelastic underlies much of the hesitancy to employ price rationing for allocation purposes. This study argues, however, that where substitutes exist, campsite demand may not be price inelastic. This possibility is investigated for a particular campground in Massachusetts and a set of “optimal” short-run prices are derived.