My local farm–Wightman’s–attracts hundreds of people during fall weekends with hayrides, apple picking, and a pumpkin slingshot.
Where are we going? To the pumpkins and then the slingshot.
Pumpkin Purchases and Planting
For Halloween, pumpkin carving is a top activity. The National Retail Federation estimates that 93 million people will have carved a pumpkin:
The traditional Halloween pumpkin is called the Jack-O-Lantern. Below you can see three of its many varieties:
Like most crops, pumpkins depend on the weather. The key here though is Halloween. If the weather is too hot, harvest time could be August. When it’s too cold, they are green at the end of October. With too much rain, they rot; too little, and they do not germinate.
Ranging from rented beehives to seeds and insurance, each planted acre costs somewhere between $3,000 and $4,500. However, if all goes well, the per acre revenue can be as much as $6,000 to $9,000.
Pricing a Pumpkin Slingshot
At my local farm, for $25 you get unlimited hayrides, access to the apple orchard (you pay extra for the apples), a pumpkin, and a tote bag. You also can navigate the giant corn maze and take your children to the hay bale pyramid.
The pumpkin slingshot is not included in the $25 package.
At the pumpkin slingshot, you pay $1 for each try or $20 for 25 tries. If your pumpkin hits a bell or lands in a barrel, you get a free pumpkin.
A typical pumpkin slingshot resembles this device:
Hoping to win, some people buy 25 tries. They repeatedly return to the slingshot (but not to the hayride although it is in the package and “free” for each extra loop.)
Our Bottom Line: Thinking at the Margin
A parking garage. the slingshot, and the hayride perfectly describe why we remember Alfred Marshall’s (1842-1924) marginal analysis.
Assume for a moment you need access to a parking space near where you work. You can purchase a monthly pass that lets you occupy a space as many times as you want for 30 days. Or, you can pay for a spot every time you go to work.
The deal you select determines your incentives. With the monthly, it is likely you will go to work more frequently. However, with the daily, you do not because you pay for each visit.
Alfred Marshall was the first economist to look at the significance of the margin. Defined as where you start to use extra, the margin determines your incentives. With the monthly package you pay nothing extra (nothing at the margin) until the month ends. But when you purchase parking each time, you have less incentive to drive to work.
Marginal analysis was Alfred Marshall’s gift to economics. He let us see that the cost of something extra is the key to understanding demand- and supply-side behavior.
Thinking at the margin, Wightman’s Farm charges us $1 or $20 for the pumpkin slingshot. They know that with appropriate pricing for extras they create the incentive for the single and multiple users. Like the slingshot, the margin is also crucial for hayride pricing. But here, the cost is zero (as part of the $25 package) because because few people want more than one when there are so many other activities.
My sources and more: For the pumpkin half of my research, Wightman’s Farm, the National Retail Federation, and the Hustle were my go-to for the facts. Then, the ideal complement was Timothy Taylor’s Alfred Marshall discussion in his Legacies of Great Economists. Somewhat similarly, you might also enjoy the Alfred Marshall chapter in New Ideas From Dead Economists. (Please note that today I’ve copied parts of a past econlife in 2017, when we last went to the slingshot.)
