The Children's Carousel in the municipal park in Lake Wobegon is evaluating its ticket prices and operating
Question:
The Children's Carousel in the municipal park in Lake Wobegon is evaluating its ticket prices and operating hours. It is open Friday through Tuesday during the summer months for 15 weeks. The following information pertains to last year's summer season. Costs are expected to remain the same for this year. Average riders per day 250 Variable operating costs per day when open (e.g., operator's salary, ticket taker's salary, electricity, fee assessed by the city for park security and maintenance) $820 Fixed overhead costs per year $36,000 Marketing costs per year 12,500 Customer service costs per year 1,000 Ticket sales price 6.50 Required: A) What is the unit cost basis (i.e., cost per rider) for establishing a long-run price for ride tickets?