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8. Understanding two-part price discrimination Consider the market for rides at an amusement park. All consumers have roughly the same demand as depicted on the following graph, which also shows the marginal revenue (MR) curve and marginal cost (MC) curve for rides at this amusement park. In particular, the marginal cost to the amusement park of an additional ride is constant at $1.60. The park uses a linear pricing strategy by selling rides to all entrants for the same price. Place the grey point (star symbol) at the profit-maximizing price and quantity. Then, use the purple rectangle (diamond symbols) to shade the area representing net operating revenue at the profit-maximizing price and quantity. 4.0 Profit Maximizing (P.C) 3.2 24 Profit PRICE (Dollars per ride) MC 1.6 Consumer Surplus MR Demand 12 QUANTITY (Number of rides) Now suppose the park decides to switch to a two-part pricing scheme by charging an admission fee but also lowering the cost of an individual ride. In this case, the profit-maximizing per-ride charge would be |$ Use the green triangle to shade the region representing consumer surplus given this pricing plan. To maximize profits, the admission fee should be set equal to |$