Question: 4. Consider the table below, which shows seven potential customers who are interested in taking a 30-minute helicopter ride. The helicopter company is a

4. Consider the table below, which shows seven potential customers who are interested in taking a 30-minute helicopter ride.

b. (20 pts.) Suppose the helicopter company could charge two prices: one for passengers age 18 and older, and one for persons

4. Consider the table below, which shows seven potential customers who are interested in taking a 30-minute helicopter ride. The helicopter company is a profit-maximizing monopolist. The helicopter has room for eight people, including the pilot. The marginal cost for any passenger is $10. Assume there are no fixed costs. (40 points) Customer Maximum Willingness to Pay Age Amelia $90 $80 $20 66 Orville 34 Wilbur 17 Neil Charles $40 $50 $100 $10 16 14 Chuck Buzz 49 15 a. (20 pts.) Using marginal analysis, if the helicopter company can only charge one price, what should it be? Support your answer. (Hint: create a market demand schedule by ranking the customers from those willing to pay the most, to those willing to pay the least; and remember the helicopter company wants to maximize its profit.) b. (20 pts.) Suppose the helicopter company could charge two prices: one for passengers age 18 and older, and one for persons aged 13 through 17. What price should they charge each group? Support your answer.

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a For 80 price level only 2 customers will be ready to pay as their maximum willingness to pay is 80 or above Total revenue of monopolist 80 2 160 For ... View full answer

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