What is the efficient level of entrance fee

Assignment Help Business Economics
Reference no: EM132184372

1. Suppose the demand curve for a public park is Q = 80 - 2p, where Q is the number of visitor-days and p is the entry price. The marginal cost of operating the park is MC = 10.

a. What is the efficient level of entrance fee and the number of visitors at this fee level (assume no congestion problems)?

b. At the price/quantity combination of (a), what is the price elasticity of demand for park visitation? (To find this, take a small change in price, say, $1. Figure out the elasticity with the change in quantity resulting from this price change. The percentage change in price and quantity is different depending on whether the price has gone up by one dollar or down by one dollar. Take the average of the two estimates.)

c. What is the price-quantity combination that maximizes revenues, and what is the price elasticity of demand at this point on the demand curve?

d. Graphically illustrate this scenario, showing the demand curve, the MC curve, the efficient outcome from (a), and the revenue max outcome from (c)

Reference no: EM132184372

Sustainably governed for the near-future effectively

List reasons why California can be sustainably governed for the near-future effectively. List reasons why this is unlikely to be the case and why. That is, why California is i

What is supply schedule for a fringe firm in the long run

An industry consists of a dominant firm with costs C(Qd) = Qd and 8 identical fringe firms, each with costs c(q) = 1 + q^2. Market demand is Q = 20 - p. What is the supply sch

Rational choice theory would predict

Jason is faced with two options: A BMW costing $40,000 gives him an additional 800 units of utility, and a laser printer costing $1,000 gives him an additional 25 units of uti

Preparing them better for a global society

Identify three changes that American society is undergoing, and discuss how those changes are reflected in schools? How can you as a teacher become better prepared for the cro

Relational database schema for library database

List the AU_Name, AU_DOB,BK_Title, & BK_List_Price for books and authors where the Author was born after January 15, 1976 and the book's BK_List_Price was more than $60.00.

Why is each the policy necessary

Why is each the policy necessary? The welfare of consumers, producers, and society (the winners and losers) before and after the policy

Compute the dynamically efficient production plan

Consider the following market demand function for coal is pt = 200 - 0.1qt: A mining company own a coal mine that has recoverable deposit amount of 2000 tonnes. The firm’s mar

Estimate linear demand function

A producer of outdoor clothing used a focus group to obtain information about the demand for fleece jackets with? built-in battery operated warming panels. At prices of?$100,


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd