The optimal prices for theme park admission in Table 5.4 are based on the assumption

that admission fees are the only source of revenue for the park. However, the

owner determines that visitors to the theme park spend an average of $12 per person

on concessions, generating an average concession margin of $5 per person. Under

the same assumptions about capacity and demand, what is the single-admission

price the theme park should charge to maximize total weekly margin (admission

price plus concession margin)? What are the individual daily prices he should

charge under a variable-pricing policy, assuming independent daily demands? What

is the impact on total weekly admissions? What is the impact on total weekly margin

from explicitly including concessions in the optimization relative to optimizing

prices on the basis of admission revenue alone?

TABLE 5.4 Theme park daily prices, attendances, and revenues under constant pricing and under variable pricing SINGLE PRICE VARIABLE PRICING Day of week Price Attendance Revenue Price Attendance Revenue Sunday Monday Tuesday Wednesday Thursday Friday Saturday TOTAL $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 1,000 250 400 461 684 1,000 1,000 4,796 $25,000 $6,250 $10,000 $11,535 $17,105 $25,000 $25,000 $119,890 $33.87 $15.00 $17.50 $18.01 $19.00 $27.00 $38.33 1,000 750 700 755 1,000 1,000 1,000 6,205 $33,870 $11,250 $12,250 $13,590 $19,000 $27,000 $38,333 $155,294 TABLE 5.4 Theme park daily prices, attendances, and revenues under constant pricing and under variable pricing SINGLE PRICE VARIABLE PRICING Day of week Price Attendance Revenue Price Attendance Revenue Sunday Monday Tuesday Wednesday Thursday Friday Saturday TOTAL $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 $25.00 1,000 250 400 461 684 1,000 1,000 4,796 $25,000 $6,250 $10,000 $11,535 $17,105 $25,000 $25,000 $119,890 $33.87 $15.00 $17.50 $18.01 $19.00 $27.00 $38.33 1,000 750 700 755 1,000 1,000 1,000 6,205 $33,870 $11,250 $12,250 $13,590 $19,000 $27,000 $38,333 $155,294