How many rides per person will maximize your profits

Reference no: EM133614603

Problem: Suppose you want to open an amusement park. Your estimate of the daily attendance is 1000 people. Further, you expect that each person will demand xp 50 50p rides, where p is the price per ride. All people are the same, and there cannot be negative rides. The marginal cost of a ride is zero. What is each person's inverse demand for rides? How many rides per person will maximize your profits? What will be the profit-maximizing price per ride? What will be your profit per person? What is the Pareto efficient (socially optimal) price per ride? How many rides will be purchased at the Pareto efficient (socially optimal) price by a single person? How much consumer surplus per person will be generated at Pareto efficient (socially optimal) price and quantity? If you decide to use a two-part tariff, what would be an admission fee and a price per ride for a single person?

Reference no: EM133614603

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