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 60,70, and 80. The marginal cost is zero. The fixed cost for the three-day period is $1200. Assume the firm uses dynamic pricing and changes its price every day to maximize profit.

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 60,70, and 80. The marginal cost is zero. The fixed cost for the three-day period is $1200. Assume the firm uses dynamic pricing and changes its price every day to maximize profit.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please help me with these questions ASAP. Thank you

a)What is consumer surplus in day 1?

B) What is the firm's profit in day 2?

c)What is the firm's total profit in 3 days?

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 60,70, and 80. The marginal cost is zero. The fixed cost for the
three-day period is $1200. Assume the firm uses dynamic pricing and changes its price every day to
maximize profit.

Consumer’s gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price and up to the equilibrium quantity. Consumer surplus is represented by area A.

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