Question 3 please (111)Will bê the movie theater's profit from group price discriminationThe individual demand for rides at an amusement park in Ellentown, Donkey Parepresented by the demand function q = 8 - p, where q is the number of rides andthe price. Donkey Park incurs a constant marginal and average cost of $2perride.(a) Suppose Donkey Park employs block pricing with two blocks. Find the promaximizing blocks and the corresponding block prices.(b) Suppose Donkey Park employs two-part pricing. Find the profit-maximizing ertrance fee and charge per ride.(c) Without calculating the deadweight loss, argue which pricing method, the one in(a) or the one in (b), results in a lower deadweight loss.3. The inverse demand a monopoly faces isp = 100 - Q+ VA,where A is the level of advertising. The monopoly incurs a constant marginal and averagecost of production of $10 and a constant marginal and average cost of advertising of $1.(a) Write down the monopoly's profit function.(b) Solve for the monopoly's profit-maximizing price, quantity, and level of advertising.F12CF5F10F11F7F8F9F6F3

We are going to use two-variable profit maximisation technique to answer this quesiton.

3. The inverse demand a monopoly faces is p = 100 - Q+ VA, where A is the level of advertising. The monopoly incurs a constant marginal and average cost of production of $10 and a constant marginal and average cost of advertising of $1.

3. The inverse demand a monopoly faces is p = 100 - Q+ VA, where A is the level of advertising. The monopoly incurs a constant marginal and average cost of production of $10 and a constant marginal and average cost of advertising of $1.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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