Suppose the Tasmanian government decided to preserve some beautiful caves in the southwestern

part of the state. To defray the cost of preservation, the Tasmanian state tourism managers decided to

open the caves to guided tours. To prepare the caves for visitors, vapour locks were built so that the

moisture content of the caves would remain stable. The Tasmanian government spent $10 million on

the facilities. Now the managers need to decide on a price for the tours.

Required

a.

Describe how pricing policies in not-for-profit entities are different from pricing policies in for

profit entities.

b.

Use the internet or other sources to identify current prices for other similar attractions in

Australia and New Zealand.

c.

What additional information would you gather to evaluate the price?

d.

Do you believe that the volume of tours is likely to be sensitive to the price charged for tours?

Why?