The Impact of Price Increase on Monthly Gym Memberships
What are the likely outcomes of a price increase for monthly gym memberships?
A. Current members will pay more per month.
B. The quantity demanded for memberships will decrease.
C. The number of available memberships will increase.
D. The owner will make more money.
E. Bond’s Gym will receive more membership applications.
Answer:
The scenarios that will arise if the price of monthly memberships increases are:
- Current members will pay more per month (Option A).
- The quantity demanded for memberships will decrease (Option B).
- The owner will make more money (Option D).
Explanation:
When the price of monthly gym memberships increases, the existing members will have to pay more per month, leading to increased income for the gym owner. However, this price increase may result in a decrease in the quantity demanded for memberships as some members may opt out due to the higher cost.
As a result, the number of available memberships may not necessarily increase, and while there may be more applications from new potential members, the overall quantity demanded may still decrease.
Therefore, it is important for gym owners to carefully consider the potential impacts of raising prices on their membership base and overall revenue.