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 $10 000 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.
Any firm can change tickets by steps of 1000 only. Prices for missing quantities are the exact midpoint between two adjacent prices.
-Refer to Table 16-1. If there is only one ecotourist company in this market, what ticket-price would it charge for its hides to maximise its profit?
Definitions:
Earnings Rate
The return on an investment for a specific period, typically expressed as a percentage of the investment's initial cost.
Internal Rate Of Return
A financial metric used to evaluate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a project equal to zero.
Useful Life
The period over which an asset is expected to be usable by a company for the purpose of its operations.
Automatic Insertion Machine
Equipment used in manufacturing to automatically place components onto printed circuit boards or other assemblies with precision and speed.
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