Question: ( 2 0 ) Demand for Desert View campground is P = 1 0 0 - 0 . 5 x ( X is overnight occupied

(20) Demand for Desert View campground is P=100-0.5x( X is overnight occupied sites.) Marginal cost to supply campsites is constant at $50(MC=ATC) and there are 50 campsites.
a. Find the efficient number of campsites used and overnight fee to charge.
b. Does the campground generate a profit, loss, or breakeven at the fee calculated in part (a).
c. Suppose the campground is required to set a price to just cover its average costs (i.e., zero profit.) At this price, what is the wait list on weekends? How can managers most efficiently ration demand?
( 2 0 ) Demand for Desert View campground is P =

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!