Disney operates two theme parks in California: Disneyland and California Adventure. Disney has long charged the same price for the two parks, currently $400 per day for a four-person family. However, with fewer tourists and more local visitors over the past year, Disney is considering park-specific pricing along with a “weekender” bundle. Disney media have a different appeal to boys and girls, which affects demand for theme parks. Disney estimates demand for three family types: Boy (B), Girl (G), and Mixed (M). Each family buys at most one ticket of each type, and there are 1 million families of each type each month. The maximum willingness to pay for each park for each family is shown in the table below. Assume the marginal cost per family per park is $150.

Family Type      Disneyland (DL)    CA Adventure       (CA) Bundle

   G                        $700                        $200               $900

   M                        $300                        $300               $600

   B                         $200                       $500                $700

Cost = $150 per family per park

a. What are the profit-maximizing prices for Disneyland and California Adventure if tickets are sold separately? How many families visit each park at this price, and what are firm profits?

PDL=?

QDL=?

PCA=?

QCA=?

Profit =?

Answer rating: 100% (QA)

a A company or business can charge the most suitable and most profitmaximizing prices where the actual prices are closest to the marginal cost Because ... View the full answer