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Suppose an amusement park faces the following demand for roller coaster rides: P = 10 Q, where P is the price of a single ride
Suppose an amusement park faces the following demand for roller coaster rides: P = 10 Q, where P is the price of a single ride on the roller coaster and Q is the number of rides. The marginal cost per roller coaster ride is $2. The amusement park decides to implement a two-part pricing scheme. They will charge a price per roller coaster ride as well as an entry fee.
(a) What is the profit-maximizing price per rollercoaster ride?
(b) What is the profit-maximizing entry fee?
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