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Suppose that the following table shows the weekly visits to an amusement park as a function of the daily admission fee charged:
# Visits Daily Fee
100 $50
300 $40
500 $30
700 $20
900 $10
a) What is the price elasticity of demand when the daily fee is $30?
b) What is the price elasticity of demand when the daily fee is $40?
c) What is the elasticity of demand at the price that maximizes total revenue?
d) Among the ones displayed in the table, what price comes closer to maximize total revenue? Verify your result computing total revenues for each price and finding the price that will give the higher total revenues.
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