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Problem
A local amusement park currently charges for each ride individually. However, they are thinking of moving to a pass that allows consumers to pay one price for unlimited use of all rides. The amusement park estimates that the typical consumer has a demand curve of Q = 30 - 4P (or P = 7.5 - 0.25Q), where Q is the quantity of rides and P is the price per ride.
Given this demand curve, answer the following questions:
I. What is the most each visitor would be willing to pay for the amusement parks unlimited use pass?II. How much consumer surplus will that visitor have upon paying the price you found in part (I)?
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