Hershey Park sells tickets at the gate and at local municipal offices to two groups of people. Suppose that the demand function for people who purchase tickets at the gate is QG = 10,000 - 100pG and that the demand function for people who purchase tickets at municipal offices is QG = 9,000 - 100PG. The marginal cost of each patron is 5. a) If Hershey Park cannot successfully segment the two markets, what are the profit- maximizing price and quantity? What is its maximum possible profit? b) If the people who purchase tickets at one location would never consider purchasing them at the other and Hershey Park can successfully price discriminate, what are the profit-maximizing price and quantity? What is its maximum possible profit?

Hershey Park sells tickets at the gate and at local municipal offices to two groups of people. Suppose that the demand function for people who purchase tickets at the gate is QG = 10,000 - 100pG and that the demand function for people who purchase tickets at municipal offices is QG = 9,000 - 100PG. The marginal cost of each patron is 5. a) If Hershey Park cannot successfully segment the two markets, what are the profit- maximizing price and quantity? What is its maximum possible profit? b) If the people who purchase tickets at one location would never consider purchasing them at the other and Hershey Park can successfully price discriminate, what are the profit-maximizing price and quantity? What is its maximum possible 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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