The marginal operating cost of each unit of quantity is $5 (since marginal cost is a constant, so is average variable cost. Ignore fixed cost). The owners of the amusement park wish to maximize profits. Calculate the price, quantity and profit if: a. The amusement park charges a different price in each market. b. The amusement park charges the same price in the two markets combined.
The marginal operating cost of each unit of quantity is $5 (since marginal cost is a constant, so is average variable cost. Ignore fixed cost). The owners of the amusement park wish to maximize profits. Calculate the price, quantity and profit if: a. The amusement park charges a different price in each market. b. The amusement park charges the same price in the two markets combined.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The marginal operating cost of each unit of quantity
is $5 (since marginal cost is a constant, so is average
variable cost. Ignore fixed cost). The owners of the
amusement park wish to maximize profits.
Calculate the
a. The amusement park charges a different price in
each market.
b. The amusement park charges the same price in
the two markets combined.
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