The following recreation demand function is for a beach: x = 4 (p/500) + q. The
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The following recreation demand function is for a beach: x = 4 − (p/500) + q. The visitation amount is represented by x (times), the travel cost is represented by p
(yen), and the water quality is represented by q (points).
a. Assume current water quality is 0 (q = 0). Express a given traveler’s consumer surplus if their travel cost were 1,000 yen.
b. Assume that when water quality improvement policy is executed, water quality increases by two points, resulting in q =2.
Express how muchthe water quality improvement policy was for the traveler.
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