We know from the lectures that the optimal policy of Disneyland involves setting price at a...

 

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We know from the lectures that the optimal policy of Disneyland involves setting price at a markup above marginal cost. How does depend on the demand elasticity ? What would happen to u if demand were infinitely elastic, i.e, = 00? Explain intuitively why and are related in this way We know from the lectures that the optimal policy of Disneyland involves setting price at a markup above marginal cost. How does depend on the demand elasticity ? What would happen to u if demand were infinitely elastic, i.e, = 00? Explain intuitively why and are related in this way

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In the context of pricing at Disneyland the markup u above marginal cost is determined in part by th... View the full answer