Question: A theme park does not have any capacity constraint and can meet demand. The management has estimated the following demand function: d = 3000 -

A theme park does not have any capacity constraint and can meet demand. The management has estimated the following demand function:

d = 3000 - 50 p

where p is the admission fee and d is the daily demand.

Due to construction, the park operator must lower its capacity to 750 customers daily.

What is the daily opportunity cost during the construction.

Hint: Find the optimal prices and resulting revenue with and without capacity constraint.

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