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In: Economics

An amusement park, whose customer set is made up of two markets, adults and children, has...

An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows:

            Qa = 20 – Pa            where a is adult market

            Qc = 30 – 2 Pc         Where c is children market

            QT = 50 – 3 PT         where T is the two markets combined

Assume that the marginal cost of each unit of quantity is $5 (constant), the owners of the park want to maximize profit:

  1. Calculate the price, quantity and profit if the amusement park charges a different price in each market.
  2. Calculate the price, quantity and profit if the amusement park charges the same price in the two markets combined.

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Expert Solution

Rahul Sunny answered 7 months ago
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