An amusement park is consideringchanging

Reference no: EM13819764

An amusement park is consideringchanging its pricing system from a pay- per-ride system to a single entrancefee entitling the entrant to unlimited rides. Assume that the park is not closeto approaching the attendance capacity. The marginal value for rides for thetypical entrant is listed below

QuantityMarginal Value

2.50

2.00

1.50

1.00

0.50

0.10

0.00

a) Assuming that the marginal costis zero to provide the rides to those in attendance, what is the bestpay-per-ride price (consider only 50 cent increments)?

b) Suppose instead the park justcharges an entrance fee. What is the profit maximizing entrance fee?

c) Under which system are profitshigher?

d) Under which system is ride usagehigher?

e) If, instead, the marginal cost of providing aride were $0.30, what revision in the pricing scheme, if any, would yousuggest? (extra credit, you may skip this question without penalty)

Reference no: EM13819764

Questions Cloud

Briefly describe one way the us financial markets impact : Briefly describe one way the U.S. financial markets impact the economy, one way the U.S. financial markets impact businesses, and one way the U.S. financial markets impact individuals.

The classical is-lm model : In a closed agricultural economy, a new water source has been discovered that is expected to provide a steady supply of water for the crops and thereby increasing expected output in the future. Assuming no other changes in the economy, answer the fol..

Consider the foreign exchange market for japanese yen : Consider the foreign exchange market for Japanese Yen and Dollars. Assume a market where the U.S. dollars are on the x axis as shown in the background material. Indicate whether the dollar would APPRECIATE or DEPRECIATE if the following events occur ..

Identify the most significant us gdp results and trends : Identify the most significant U.S. GDP results and trends for the most recent three-year period. Indicate the key factors that you believe have had an impact on the GDP increase or decrease.

An amusement park is consideringchanging : An amusement park is consideringchanging its pricing system from a pay- per-ride system to a single entrancefee entitling the entrant to unlimited rides. Assume that the park is not closeto approaching the attendance capacity. The marginal value for ..

Draw the uml class diagram : Draw the UML class diagram

Develop the event and how it aligns with the firm mission : Develop the event. Explain how it aligns with the firm's mission with a definable target audience. Describe how you will link the image of the firm and the event. Keep in mind that people attend events mainly because of a connection with the theme or..

Examine factors that have allowed the concept of federalism : Examine three to five factors that have allowed the concept of federalism to shape American political behavior. Provide three examples of how federalism has evolved from its origins to American political system in place today.

Contribution income statement-traditional income statement : What is the difference between a contribution income statement and a traditional income statement? Under what circumstances would a firm use each?

User Account

All Pages