Table 16-1
the Table Below Shows the Total Demand for Viewing

question 65

Multiple Choice

Table 16-1
The table below shows the total demand for viewing a rare penguin species at a local reserve.Ecotour companies have to build discreet viewing hides for tourists to view the penguins.Each ecotour company has to pay a fixed fee of $5000 for the right to build on the reserve.Assume that hides can be supplied to tourists at zero marginal cost.Tickets are sold to tourists to use the viewing hides. $\begin{array}{|c|c|}\hline \text { Quantity (Visits) } & \text { Price(\$ ticket) } \\\hline 0 & 48 \\\hline 2000 & 36 \\\hline 4000 & 24 \\\hline 6000 & 12 \\\hline 8000 & 8 \\\hline 10000 & 4 \\\hline 12000 & 0 \\\hline\end{array}$ $\begin{array}{|c|c|c|}\hline \text { Quantity (Visits) } & \text { Price(\$ ticket) } & \text { Revenue } \\\hline 0 & 12 & 0 \\\hline 1000 & 10 & 10 \mathrm{k} \\\hline 2000 & 8 & 16 \mathrm{k} \\\hline 3000 & 6 & 18 \mathrm{k} \\\hline 4000 & 4 & 16 \mathrm{k} \\\hline 5000 & 2 & 10 \mathrm{k} \\\hline 6000 & 0 & 0 \\\hline\end{array}$ Any firm can change tickets by steps of 500 only.Any 500 step of quantity is assumed to be sold at the midpoint of the two prices (eg.3500 tickets would be sold for $5)
-Refer to Table 16-1.Assume that there are two ecotourist companies operating in this market.If they are able to collude on the price of tickets to sell, what price will they charge, and how many tickets will they collectively sell?

• A)$2 and 5000 tickets
• B)$4 and 4000 tickets
• C)$6 and 3000 tickets
• D)$8 and 2000 tickets

Analyze the concepts of capital budgeting decisions, including capital rationing and project selection based on financial metrics.

Distinguish between various capital project types and their respective risk profiles.

Acknowledge the impact of reinvestment assumptions on project evaluation methods.

Understand the practical implications and limitations of capital budgeting techniques.

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Definitions:

Volume Emphasis

Volume emphasis is the control and adjustment of voice loudness in communication, highlighting certain parts of the message for impact.

Anti-Whaling Laws

Regulations and legislation designed to protect whales by prohibiting or limiting whaling activities.

Startling Fact

An unexpected or surprising piece of information that captures attention and can be used to emphasize the importance of a topic or argument.

Human-Interest Story

A news article or report focusing on an individual's personal experience or story, aiming to evoke emotional responses from the audience.