4. A ski resort faces daily demand given by p = a - Q, where a varies from day to day. Over a three- day period, a takes on the values 80.100, and 120. The marginal cost is zero. The fixed cost for the three-day period is $2500. If the firm uses dynamic pricing, it changes its price every day to maximize profit. If it uses non-dynamic pricing, it sets the same price for all three days, assuming that a takes on its average value of 100 each day. Calculate the consumer surplus and the firm's profit over the three-day period under each pricing approach.

4. A ski resort faces daily demand given by p = a - Q, where a varies from day to day. Over a three- day period, a takes on the values 80.100, and 120. The marginal cost is zero. The fixed cost for the three-day period is $2500. If the firm uses dynamic pricing, it changes its price every day to maximize profit. If it uses non-dynamic pricing, it sets the same price for all three days, assuming that a takes on its average value of 100 each day. Calculate the consumer surplus and the firm's profit over the three-day period under each pricing approach.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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