The European Mink once roamed throughout the continent living near streams from Spain to Russia but is currently threatened with extinction mostly due to habitat loss. Austrian research scientist, Falco, has heard rumors of a stable population emerging near the Mur River in Austria. Falco was so excited about the news, he was heard shouting through the streets "Mur equals Mink!"

Falco supports his scientific research with ecotourism. Specifically, he offers guided day trips via kayak that include lectures on minks and discussions of their habitat in their native environment. The demand for Falco's tours is given by Q = 40 - 0.2P where Q is in adult tourists per day and P is in Euros. Falco's marginal cost is zero Euros since he plans to kayak through the habitat daily anyway and he enjoys talking about minks.

1a. Determine Falco's profit maximizing price to charge each tourist.

1b. In order to minimize the disruption to the minks and their habitat, Falco has decided to limit the number of tourists to a maximum of 12 per day. How much should he charge for a tour given this constraint?

1c. [for this question, ignore part b.] Falco realizes that many of the tourists are mink lovers who would support his research efforts with a donation. If the expected value of a donation is equal to 40 Euro per tourist, determine the profit maximizing price for a tour?

1d. [for this question ignore parts b and c.] Falco knows if he could make a better sales pitch for his research, he could increase the typical donation. At what level of expected donation does it make sense for Falco to offer his tours for free?

1e. Compute the price elasticity of demand for Falco's tours at the price you computed in part c.