Apparently, parking lots around Yankee stadium are defaulting on their bonds due to insufficient demand.  Among their other problems is a nearby shopping center siphoning off their cars by charging $5 a pop to use its unused parking spaces--versus $20 at the stadium.  Naturally, in order to cope with this competition, the parking lots are raising their prices dramatically.


It's easy to scoff, but in situations where there's excess capacity, it's not always clear what the best pricing move is.  You can try to turn yourself into a luxury product with lower volumes (attracting the people who are willing to pay $40 to park right next to the stadium), or you can slash your prices to remain competitive, covering your marginal costs, but not your average cost.  As the link suggests, what's really needed is for some of that excess capacity to go away.  But that's easier said than done.

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