Cultural productions are considered as a sign of civilization in modern societies. Theater is known as an important type of cultural productions, playing important role in the cultural economy of a society. Due to complexities of socio-economic interactions, this sector needs dynamic investigation to illuminate different aspects of possible potentials and threats. The present paper tries to find relationships between Iran public theater economy and production structure based on a dynamic model including all economic stages, namely production, distribution, and consumption to achieve a solid perception of Iran theater position. The authors use System Dynamics to create a model that can explain or mimic the behavior of the system in order to evaluate policies. Since Tehran City Theater complex is the sole place for the public theater in Iran, the authors assess it over the period 2012-2015 and predict its behavior to 2022. On the other hand, the investigation in this context is being directed in accordance with microeconomics principles. The results indicate that the position of Iran public theater is undesired due to vague managerial policy. Also, the findings offer insights into the problems and suggest practical solutions.