Question

Suppose that the demand curve of the only customer in an amusement park is Qd =...

Suppose that the demand curve of the only customer in an amusement park is Qd = 200 - P.

The park charges an admission fee of Php 100, while each ride costs Php 9.

Answer the following questions:

1. Determine the supply curve of the amusement park

2. Determine the producer surplus without distortions in the market

3. Determine the consumer surplus without distortions in the market

4. What is the price at which deadweight loss is minimized?

5. At which quantity does it occur (in rides)?

6. If the government wishes to limit the number of rides per person to at most 5 per person, calculate the loss in economic efficiency.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The typical customer of an amusement park has a demand for rides of qD = 30...
The typical customer of an amusement park has a demand for rides of qD = 30 – 10PD where q is measured in number of rides and P in dollars per ride. a. Suppose the marginal cost of any ride is $2. How much should the amusement park charge in admission fee? Clearly explain. b. Suppose instead the marginal cost of a ride increases with the overall number of rides according to the schedule MC = $2 + 0.001Q where...
The typical customer of an amusement park has a demand for rides of qD = 30...
The typical customer of an amusement park has a demand for rides of qD = 30 – 10PD where q is measured in number of rides and P in dollars per ride. a. Suppose the marginal cost of any ride is $2. How much should the amusement park charge in admission fee? Clearly explain. b. Suppose instead the marginal cost of a ride increases with the overall number of rides according to the schedule MC = $2 + 0.001Q where...
Lisa and Maggie like to go to the only amusement park in town. Lisa’s demand for...
Lisa and Maggie like to go to the only amusement park in town. Lisa’s demand for rides is given by Q(L) = 5 - P, and Maggie’s demand is Q(M) = 15 - 3P (P is the price per ride). The marginal cost for the park of each ride is 1 dollar. (a) Suppose that the park charges P = 3 dollars per ride. What is the maximal entrance fee that the park can charge so that Lisa will choose...
Anil is planning a birthday party at an amusement park for his young daughter and her...
Anil is planning a birthday party at an amusement park for his young daughter and her friends. The manager of the park is considering whether to use uniform pricing or two-part-pricing. Anil’s willingness to pay for rides for the party is p = 25 - 0.5Q, where p is the ticket price per ride and Q is the number of rides. The amusement park has a marginal cost of $5. Its fixed cost for handling the party is $20. MR=25-Q;...
.An amusement park faces large fixed costs of $500,000 per month and low average variable costs...
.An amusement park faces large fixed costs of $500,000 per month and low average variable costs of $10 per visitor. It charges all visitors a flat entry fee of $50 for unlimited rides. a) .What is the breakeven point for this park? b) .The park currently has 42,000 visitors a month and proposes to raise its entry fee to $60 per person in order to cover the cost of a new Harry Potter–themed ride. What is the new breakeven point...
6. Suppose the demand equation can be represented as QD = 1200 – 10p and the...
6. Suppose the demand equation can be represented as QD = 1200 – 10p and the Supply equation by Qs= 10p. a. Solve for the equilibrium price and quantity. b. Say an excise tax of $5 was placed on the buyers. Solve for the price buyers pay, price that sellers receive, and the quantity sold in the market after the tax. Show your work and results graphically. c. Find the deadweight loss, consumer surplus, producer surplus, consumer surplus, and tax...
The (market-level) choke price for admission to Lake Lurleen State Park is $25. The current admission...
The (market-level) choke price for admission to Lake Lurleen State Park is $25. The current admission fee is $5, which generates gross revenue of $50,000 for the state park service.To receive full credit show all work. a.Derive the underlying parameters of the market-level demand function for annual visits to Lake Lurleen State Park. b.Obtain an estimate of the elasticity of demand for visits at the current price-quantity combination. Interpret this estimate. c.Obtain an estimate of total willingness to pay for...
the following demand and supply curves: QD = 80,000 - 2,000P and QS = -25,000 +...
the following demand and supply curves: QD = 80,000 - 2,000P and QS = -25,000 + 5,000P 3. What is the consumer surplus in this example of supply and demand? What is the producer surplus in this example? How much are the variable costs to the firm in this example? 4. Suppose the government were to impose a price ceiling of $10 on the sale of each unit sold in this market. Is there a shortage or a surplus? By...
Suppose the demand curve for a good is Q =9 −pand the supply curve is Q...
Suppose the demand curve for a good is Q =9 −pand the supply curve is Q =2p. The government imposes a specific tax of =1 per unit. What would be the equilibrium? What effect does the tax have on consumer surplus, producer surplus and deadweight loss?
Suppose the doll company American Girl has a demand curve of P = 150 – 0.25Q....
Suppose the doll company American Girl has a demand curve of P = 150 – 0.25Q. The marginal cost is given by MC = 10 + 0.50Q. A) Calculate consumer surplus and producer surplus at the profit maximizing level of output. B) Calculate deadweight loss at the profit maximizing level of output. C) Calculate consumer surplus, producer surplus, and deadweight loss at the efficient level of output.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT