Knoebels Amusement Park in Elysburg, Pennsylvania, charges an access fee,, to enter its Crystal Pool. It also
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Knoebels Amusement Park in Elysburg, Pennsylvania, charges an access fee, ℒ, to enter its Crystal Pool. It also charges p per trip down the pool’s water slides. Suppose that 400 teenagers visit the park, each of whom has a demand function of q1 = 5 - p, and that 400 seniors also visit, each of whom has a demand function of q2 = 4 – p. Knoebels’ objective is to set ℒ and r so as to maximize its profit given that it has no (non-sunk) cost and must charge both groups the same prices. What are the optimal ℒ and r?
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Microeconomics Theory and Applications with Calculus
ISBN: 978-0133019933
3rd edition
Authors: Jeffrey M. Perloff
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