1. A perfectly competitive firm is making losses in the short-run. Will the market price rise or fall in the long-run? Explain your answer.
2. Suppose that the amusement park owner can practice perfect first-degree price discrimination by charging a different price for each ride. Assume that all rides have zero marginal cost and all consumers have the same tastes. Will the monopolists do better charging for rides and setting a zero price for admission, or better by charging for admission and setting a zero price for rides?
3. Disneyland also offers a discount on admissions to residents of Southern California. (You show them your zip code at the gate). What kind of price discrimination is this? What does this imply about the elasticity of demand for Disney Land attractions by Southern Californians?