3. Discussion 4. Conclusion The requirements for each section of the report are detailed below. 3.1 Introduction In your introduction you should succinctly and accurately summarises the purpose of your report. You should also outline the methodology employed in your analysis, and your key findings. The introduction has a 200 word limit. 3.2 Analysis In the analysis section you must complete each of the steps detailed below. When completing the steps you must: - Type all equations using the 'Insert Equation' function (or equivalent). - Show all of your working and include sufficient written description for the reader to follow your process. Note that hand draw figures and equations are not acceptable. There is no word/page limit for the analysis section. Step 1: Derive an expression for the location of the indifferent consumer. Use PA to represent the price of admission at Alfonso's Wonderland, and PB to represent the price of admission at Bernice's Wild Rides. (2 marks) Step 2: Find the profit function for Bernice's Wild Rides. You should assume that Bernice's marginal cost is $11. (4 marks) Step 3: Find Bernice's best-response function. (4 marks) Step 4: Find the profit function for Alfonso's Wonderland for the case in which their marginal cost is $5. ( 4 marks) Step 5: Find the best-response function for Alfonso's Wonderland for the case in which their marginal cost is $5. (4 marks) Step 6: Find the equilibrium prices and profits for the case in which Alfonso's marginal cost is $5 and Bernice's marginal cost is $11. (7 marks) 3. Discussion 4. Conclusion The requirements for each section of the report are detailed below. 3.1 Introduction In your introduction you should succinctly and accurately summarises the purpose of your report. You should also outline the methodology employed in your analysis, and your key findings. The introduction has a 200 word limit. 3.2 Analysis In the analysis section you must complete each of the steps detailed below. When completing the steps you must: - Type all equations using the 'Insert Equation' function (or equivalent). - Show all of your working and include sufficient written description for the reader to follow your process. Note that hand draw figures and equations are not acceptable. There is no word/page limit for the analysis section. Step 1: Derive an expression for the location of the indifferent consumer. Use PA to represent the price of admission at Alfonso's Wonderland, and PB to represent the price of admission at Bernice's Wild Rides. (2 marks) Step 2: Find the profit function for Bernice's Wild Rides. You should assume that Bernice's marginal cost is $11. (4 marks) Step 3: Find Bernice's best-response function. (4 marks) Step 4: Find the profit function for Alfonso's Wonderland for the case in which their marginal cost is $5. ( 4 marks) Step 5: Find the best-response function for Alfonso's Wonderland for the case in which their marginal cost is $5. (4 marks) Step 6: Find the equilibrium prices and profits for the case in which Alfonso's marginal cost is $5 and Bernice's marginal cost is $11. (7 marks)
