There is only oneamusement park in the market and it is visited by 10000 identical individuals per day when there is free entrance to the park. Revenue is generated by selling joy ride tickets. The individual demand for joy ride tickets is Q=20-P where P is the price of the tickets. There is no other motivation for people to enter the park except for the joy rides. Assume that there are no fixed costs of running the park and that the marginal cost for the park to provide joy rides is constant and equal to 2.

a. What price should the amusement park charge if they want to provide rides and just make sure they cover their total costs?............

b.How large is the loss if they provide the rides for free? ................

c.What price of joy ride tickets should the amusement park charge if they want to maximize profit?.............

d.Instead of selling tickets one by one, the amusement park managers intend to charge a fixed price for allowing the individuals into the park and let them enjoy as many rides as they want.

What is the highest price they can charge?..............

how large is the resulting consumer surplus?.............