Question: A theme park in Halifax charges an access fee, A, to enter its pool. It also charges p per trip down the pool's water slides.

A theme park in Halifax charges an access fee, A, to enter its pool. It also charges p per trip down the pool's water slides. Suppose that 400 teenagers visit the park, each of whom has the demand function of q1 = 5 - p, and that 400 seniors also visit, each of whom has a demand function of q2 = 4 - p. The company's objective is to set A and p to maximize its profit given that it has no (non-sunk) cost. What are the optimal A and 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!