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An amusement park has estimated the following demand equation for the average park guest Q=162P Where Q represents the number of rides per guest and
An amusement park has estimated the following demand equation for the average park guest
Q=162P
Where Q represents the number of rides per guest and P the price per ride. The total cost of providing rides to a guest is
TC=2+0.5Q
a.) If a one-price policy is used, how much should it charge per ride if the park wishes to maximize its profit?
b.) What is the park's profit for each guest?
c.) If a two-part tariff policy is used, what admission fee should the park charge to maximize its profit?
d.) What is the park's profit for each guest?
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