The marginal operating cost of each unit of quantity is $5. Because marginal cost is a constant, so is average variable cost. Ignore fixed costs. The owners of the amusement part want to maximize profits.

Calculate the price, quantity, and profit if:

1. The amusement park charges a different price in each market.
2. The amusement park charges the same price in the two markets combined.
3. Explain the difference in the profit realized under the two situations.
   

Problem 3: Price Discrimination (40 points) An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows: Quantity Price ($) Adults Children 5 20 6 14 18 13 16 12 14 11 12 10 10 10 11 9 8 12 8 13 4 14 6 N The marginal operating cost of each unit of quantity is $5. Because marginal cost is a constant, so is average variable cost. Ignore fixed costs. The owners of the amusement part want to maximize profits. Calculate the price, quantity, and profit if: 1. The amusement park charges a different price in each market. 2. The amusement park charges the same price in the two markets combined. 3. Explain the difference in the profit realized under the two situations