A town wants to build a zoo. The zoo has fixed costs of $3,000,000.00. The town has120,000 people. It can either charge a tax or charge a price per visit. The demandfunction each person has is Q = 10 – P. If the town wants to break even on its fixedcosts, what tax should be charged. What is the consumer surplus in this case. Whatprice "P" should be charged to break even. What is the consumer surplus in that case?Which choice is better for the public?

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Answered: A town wants to build a zoo. The z…

A town wants to build a zoo. The z 120,000 people. It can either charg function each person has is Q= 10 costs, what tax should be charged.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A town wants to build a zoo. The zoo has fixed costs of $3,000,000.00. The town has
120,000 people. It can either charge a tax or charge a price per visit. The demand
function each person has is Q = 10 – P. If the town wants to break even on its fixed
costs, what tax should be charged. What is the consumer surplus in this case. What
price "P" should be charged to break even. What is the consumer surplus in that case?
Which choice is better for the public?

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