What happened to the maintenance budget for golf courses?
Out of necessity, maintenance budgets were frozen or cut at many golf courses while the cost of many inputs – e.g., plant protectants, water, equipment – continued to rise.
Why are golf facilities so expensive?
Many facilities now are exposed to high costs caused by failure to replace old equipment or upgrade inadequate facilities, including higher equipment repair costs, reduced efficiency, increased labor requirements, playability issues and many others. Failing to invest in improvements and upgrades may also affect how golfers perceive a facility.
Can allocative efficiency exist under perfect competition?
True allocative efficiency can only exist under perfect competition. This is because perfectly competitive firms are profit maximizers. They must operate under strong competition which brings marginal revenue in line with marginal costs.
Why did some golf courses fail during the recession?
Some courses obtained terrific deals on capital expenditures during the worst of the recession. Unfortunately, many courses simply did not have enough liquid capital to take advantage of the reduced pricing offered by golf course contractors.
Why are golf courses removed from the Southwest?
Out of necessity, many courses in the Southwest removed maintained rough in peripheral areas to cut down on water usage and save money. For years, golf courses have also replaced mown rough with naturalized or unmown rough.
What was the effect of the recession on golf courses?
The good news is that the recession caused golf facilities to re-evaluate maintenance practices, presentation options and course amenities. Many golf courses were forced to differentiate between essential and nonessential maintenance programs so they could focus on what matters most.
What is the most frequently mowed area of golf courses?
Putting greens are the most frequently mowed area of golf courses and the associated costs are significant. Mower technology has improved to the point where triplex units can produce a quality of cut equivalent to that of walk-behind mowers.
How does failing to invest affect golf?
Failing to invest in improvements and upgrades may also affect how golfers perceive a facility. Golf is a competitive business, and golfers are more likely to play at golf courses that demonstrate a commitment to quality by making improvements.
How did the recession affect golf?
These effects are not surprising given the challenges created by an oversupply of golf courses that is partially the product of the aging golfer demographic and declining participation rates among younger generations. Furthermore, extended periods of severe drought have increased the price of water and limited its availability for golf courses.
Does fertilizer save money?
Fertilizer and Plant Protectants. Carefully analyzing fertilizer costs can reveal some significant opportunities to save money even though fertilizer does not represent a major percentage of a typical golf course maintenance budget.
Is golf course maintenance competitive?
Golf course maintenance work is demanding and the labor market is very competitive. Recruiting and retaining reliable maintenance staff is currently one of the biggest challenges at golf facilities across the country. Additionally, there are many hidden costs associated with hiring and training new maintenance employees.
Why can allocative efficiency only exist under perfect competition?
True allocative efficiency can only exist under perfect competition. This is because perfectly competitive firms are profit maximizers. They must operate under strong competition which brings marginal revenue in line with marginal costs. In turn, this creates an environment that maximizes the consumer’s utility.
How does allocative efficiency work?
When the market is allocatively efficient, the producer will continue to produce more and more up till the point where marginal cost is equal to price. In other words, where it no longer makes a profit. This is where the cost to make an additional good is equal to the price that it sells that good for. This may be due to a number of factors which make the good more expensive to produce as production increases (also known as diseconomies of scale).
What is allocation efficiency?
So what is meant by Allocative Efficiency? Allocative efficiency occurs when consumer demand is completely met by supply. In other words, businesses are providing the exact supply that consumers want.
When is a market allocatively efficient?
From the consumer’s perspective, a market is allocatively efficient when the price reflects the maximum they are willing to pay. In other words, allocative efficiency is where the consumers satisfaction is maximized in relation to cost. For instance, the consumer may be willing to spend a maximum of $5 on a bagel.
What happens to utility as the price increases?
As the price increases, the level of utility or satisfaction decreases. For instance, few would enjoy a croissant if they had to pay $50 for it. So allocative efficiency is where consumers maximize their utility, but also the price they pay.