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Disney World charges two different prices for adult and child daily general admission to the park....

Disney World charges two different prices for adult and child daily general admission to the park. The price of an adult ticket is $122. The price of a child ticket (ages 3–9) is $117. Since the park is already established and operating, suppose the marginal cost of each additional ticket is constant at $90. Using this information, graph each market segment for Disney. Include the marginal revenue, marginal cost, and demand curves for each segment.

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Answer #1

It shall be observed that the firm Disney World could charge different prices to adults and children in order to get them right to admission to the park.

P1 = Price of an adult ticket = $122

P2 = Price of the child ticket (age 3-9) = $117

The marginal cost of each additional ticket = constant = $90

On graphing each market segment for Disney the result is:

Thus, the marginal revenue (MRa: Market A and MRb: Market B) and the marginal cost (horizontal dotted line at $50) and the demand curve (Da: Market A and Db: Market B) are also shown.

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