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3500 people are interested in visiting an amusement park. The demand for rides by each of the 3500 consumers is given by q = 7
3500 people are interested in visiting an amusement park. The demand for rides by each of the 3500 consumers is given by q = 7 p if p is not more than 7 and q = 0 if p > 7, where p is the price per ride. The amusement park faces a constant marginal cost of 3 for each ride. The amusement park charges a profit maximising two-part tariff, with one price for admission and another price per ride for those customers who have already paid for admission. How much should the amusement park charge per ride and how much for admission?
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