Economic Analysis of a Firm

Topics: Supply and demand, Music, Elasticity Pages: 6 (1741 words) Published: August 5, 2013
Running head: ECONOMIC ANALYSIS OF INTERLOCHEN SUMMER ARTS CAMP

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Economic Analysis of Interlochen Summer Arts Camp

Northwestern Michigan College

ECONOMIC ANALYSIS OF INTERLOCHEN SUMMER ARTS CAMP Economic Analysis of Interlochen Summer Arts Camp

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1. What is the market supply of the products and services your company produces: Number of firms and approximate size (as measured by number of employees). As a fine arts camp, Interlochen does not limit itself only to one or two arts as many other small summer camps do. As such, the market supply of its services varies with which segment is considered. Camps may specialize in painting, drawing, photography cinematography, music, theatre, dance, or any number of arts. Each of these different categories is catered to by hundreds of different small camp programs and workshops, each one varying in the number of campers and staff and faculty members. Also, it depends on whether you consider all arts camps, or only the larger ones which compete on the level that Interlochen does. There are hundreds of small arts camps around the country (MySummerCamps.com), but only about 20 that can be considered in the same bracket as Interlochen (Haight, 2010) (Estrella). During its summer program Interlochen employs 1350 people, but other camps generally employ less (Haight, 2010). For instance: Interlochen’s competitor Blue Lake employs about 700. (Blue Lake: Employment) If taking an estimated average employment of 1000 people, multiplied by an estimated 20 major arts camps, the market supply measured by number of employees for intensive summer arts programs would be about 20,000. 2. What is the market demand for the products and services your company produces? Is demand growing or declining? Interlochen’s attendance for the 2010 summer camp is about 2,500 (Interlochen Center for the Arts: Facts at a Glance), while Blue Lake, a major competitor, has a total attendance of about 5,300 this year for its programs (Blue Lake). Another smaller competitor, Meadowmount , only has about 200 attendants annually (About Meadowmount). At an estimated average of 2,500 attendants for an estimated 20 major summer arts programs, the estimated market demand for high quality, intensive summer arts programs is about 50,000 attendants. Interlochen’s total revenues of gross tuition and student fees has increased by an average of about $2,000,000 a year over the past four years (Interlochen: Annual Reports and Financial Statements). This is of course coupled with the steady increase of campers attending the summer program. For example, attendance has increased from 2400 in 2009 to 2500 in 2010 (Haight, 2010) Since there has been no substantial change in summer program tuition costs over the years, these facts together are a good indication that demand for prestigious summer arts camps has been gradually increasing over the years.

3. What externalities (positive and negative effects outside the market exchange of buyer and seller) are produced by your company? How are they dealt with by the company and by government laws, regulations and agencies: Are, or can they, be incorporated into the costs for the company? See Chapter 4 of the textbook. Interlochen creates positive externalities since it is an educational facility. Though much of the students skills developed at Interlochen will later be used in an economic context and could be considered an investment made by Interlochen consumers for the future of their career, much of

ECONOMIC ANALYSIS OF INTERLOCHEN SUMMER ARTS CAMP

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their talents and skills will be utilized in the voluntary sector and go unpaid, creating a free benefit to society of music and musical talent. On the other hand, the substantial amount of waste accumulated over the course of the summer camp must be considered as a negative externality. The camp hosts 2,500 children and teenagers each year, which needless to say produce a lot of trash. Though Interlochen pays for a...

Bibliography: About Meadowmount. (n.d.). Retrieved from Meadowmount School of Music Web site: http://www.meadowmount.com/about.shtml Blue Lake. (n.d.). Retrieved from Blue Lake Fine Arts Camp Web site: http://www.bluelake.org/ Blue Lake: Employment. (n.d.). Retrieved from Blue Lake Fine Arts Camp Website: http://www.bluelake.org/employment.html Estrella, E. (n.d.). Summer Music Camps. Retrieved from About.com: Music Education: http://musiced.about.com/od/musicschools/a/summercamps.htm Haight, C. (2010, July 31). Interview with Interlochen Human Resources Assistant. (B. Masserant, Interviewer) Interlochen Center for the Arts: Facts at a Glance. (n.d.). Retrieved from Interlochen Center for the Arts Web site: http://www.interlochen.org/content/interlochen-center-arts-facts-glance Interlochen: Annual Reports and Financial Statements. (n.d.). Retrieved from Interlochen Center for the Arts Web site: http://www.interlochen.org/support/annual-reports MySummerCamps.com. (n.d.). Retrieved from http://www.mysummercamps.com/camps/Arts_Camps/index.html
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