The #1 theme park in the world is in Orlando and is setting prices for the...
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The #1 theme park in the world is in Orlando and is setting prices for the glossy park maps it sells in its gift shop, which show high-quality pictures of the attractions along with descriptions and commentary. An economist helping them with the decision has estimated that the elasticity of demand for maps among locals and out of state visitors are -2 and -1.25, respectively. The marginal cost of production of map is $8. a) What must be the price of a guide for locals and the price of a guide for visitors, if the theme park has set prices to maximize profit? b) The map has been published in English as well as in Spanish, Japanese, Hindi and five other languages. Explain why this helps make the pricing strategy in (a) feasible The #1 theme park in the world is in Orlando and is setting prices for the glossy park maps it sells in its gift shop, which show high-quality pictures of the attractions along with descriptions and commentary. An economist helping them with the decision has estimated that the elasticity of demand for maps among locals and out of state visitors are -2 and -1.25, respectively. The marginal cost of production of map is $8. a) What must be the price of a guide for locals and the price of a guide for visitors, if the theme park has set prices to maximize profit? b) The map has been published in English as well as in Spanish, Japanese, Hindi and five other languages. Explain why this helps make the pricing strategy in (a) feasible
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Answer rating: 100% (QA)
a To determine the optimal prices for the glossy park maps that maximize profit we need to consider the concept of price elasticity of demand The pric... View the full answer
Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
Posted Date:
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