The city of Winnipeg is considering whether to build a new public ice rink. This rink wouldhave a capacity of 800 ice skaters per day, and the proposed admission fee is $6 perindividual per day. The estimated cost of the ice rink, averaged over the life of the rink, is$4 per ice skater per day.The city of Winnipeg has hired you to assess this project. Fortunately, Ottawa already hasan ice rink, and the city of Ottawa has randomly varied the price of that rink to find howprice affects usage. The results from their study follow:Ice rink price Number of ice skatersper day$8$10$4$6$2per day50020011008001400a. If the ice rink is built as planned, what would be the net benefit per day from the icerink? What is the consumer surplus for ice skaters?b. Given this information, is an 800-ice rink the optimally sized ice rink for Winnipeg tobuild? Explain.

Answered: Image /qna-images/answer/a0f95275-323b-4f61-9ab9-6d53108a9fd8.jpg

Answered: The city of Winnipeg is considering…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Calculate the sales variance in dollars and the sales variance as a percentage given the following information: last year's sales $2,825,000; this year's sales $3,000,500. $5,825,500 and 9.41% $175,500 and 6.21% $5,825,500 and 10.62% $175,500 and 9.41%
Mary Williams, owner of Williams Products, is evaluating whether to introduce a new product line. After thinking through the production process and the costs of raw materials and new equipment, Williams estimates the variable costs of each unit produced and sold at $8 and the fixed costs per year at $70,000. If the selling price is set at $13.50, Williams forecasts that first-year sales would increase to 17,000 units. Which pricing strategy ($15.00 or $13.50) would result in the greater total contribution to profits?
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