Suppose you are an owner of an amusement park. You can assume that all your customers have an identical demand curve for rides in your park which is given by: Q = 20 - P. The marginal cost you are facing is constant at MC = $3 and you expect to serve 10,000 customers per week.

The pricing scheme that you want to set up is a two-part tariff, where you charge an entrance fee of (T) as well as the usage fee (P) for every ride. Show all work when answering the following questions.

a. What profit-maximizing usage fee (P*) should you charge?

b. What profit-maximizing entrance fee (T*) should you charge?

c. What would be your weekly profits?