Determine elasticity of demand-revenue maximizing price

Reference no: EM1316514

Suppose that the typical snowboarder skier visiting Mount Mogul ski resort on a typical day would be willing to pay for lifts up the mountain according to the following schedule.

a) Why does the WTP schedule slope downward?

b) Suppose all skiers at Mount Mogul had the same WTP schedule as this skier and the resort operator charged $5per ride up the lift. What is the elasticity of demand at this price?

c) Is $5/lift ride the per ride price which maximizes revenue? Explain, using the elasticity concept in your answer:

d) Show the area on the graph that would correspond to consumer's surplus earned by the typical boarder/skier with this payment scheme. Explain your answer briefly.

e) If the ski-resort owner eliminates the possibility of buying single ride lift tickets and instead sells only an all-day lift pass, entitling the skier/boarder to as many trips up the mountain as desired, what is the maximum price that could be charged without discouraging the skier from coming to Mount Mogul?

Reference no: EM1316514

Questions Cloud

Concepts of efficiency and profit maximize : Indicate whether each of the following statements is true, false, or uncertain, and explain your answer.

Determining risk as well as return of a portfolio : Determining risk as well as return of a portfolio and explain how the Selected Realized Returns

Perform repeated measures anova also calculate pre : Perform Repeated Measures ANOVA also calculate PRE. An educational study uses a simple pre-post design to assess the value of a computer tutor for solving inequalities.

What percent of freshmen eventually graduate : IS there any evidence that a freshman's chances to graduate may depend upon what kind of high school the student attended? Describe.

Determine elasticity of demand-revenue maximizing price : Show the area on the graph that would correspond to consumer's surplus earned by the typical boarder/skier with this payment scheme. Explain your answer briefly.

Risk as well as return analysis of a short term investment : Risk as well as return analysis of a short term investment and Federal and state taxes will be paid on CD but only federal will be paid on Treasury bill

Find the value of the pronominal : Find the value of the pronominal.

Probability-transact business in a foreign language : What is the probability that none can transact business in a foreign language?

What''s the probability that a randomly selected : A check of dorm rooms on a large college campuses revealed that 38% had refrigerators, 52 percent had TVs and 21 percent had both a TV and a refrigerator. What's the probability that a randomly selected dorm room has.

User Account

All Pages