The Walt Disney Company Is in a Position to Use

question 22

Multiple Choice

The Walt Disney Company is in a position to use a two-part tariff by charging for admission and also charging for rides inside its two theme parks, Disneyland and Disney World.Which of the following statements regarding Disney's pricing strategy is true?

• A)At one time, admission fees were charged at both parks but all rides were free. Disney has since changed its pricing policy; it earns higher profits by charging for both admission and rides.
• B)At one time, customers had to pay for admission and rides at Disneyland and Disney World. Disney has since changed its pricing policy; it earns higher profits by charging for admission but not for rides.
• C)At one time, customers had to pay for admission and rides at Disneyland and Disney World. Disney has since changed its pricing policy; it earns higher profits by charging for rides but not for admission.
• D)At one time, fees for admission and rides at both parks were set at their profit-maximizing levels. Disney has since changed its pricing policy; it uses a cost-plus pricing strategy for admission and does not charge for rides.

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Definitions:

Sensory Adaptation

The method through which sensory receptors decrease in sensitivity to unchanging stimuli, enabling people to concentrate on environmental variations.

Difference Threshold

The smallest detectable difference between two stimuli or the minimum change in stimulus intensity that can be sensed.

Absolute Threshold

The minimum intensity of stimulus that is required for a person to detect its presence 50% of the time.

Light Bulbs

Devices that produce light from electricity, consisting of a filament that glows when heated by an electric current.