Suppose That 3,500 People Are Interested in Attending ElvisLand

question 7

Multiple Choice

Suppose that 3,500 people are interested in attending ElvisLand. Once a person arrives at ElvisLand, his or her demand for rides is given by x = max{ 7 - p, 0} , where p is the price per ride. There is a constant marginal cost of $3 for providing a ride at ElvisLand. ElvisLand charges a profit-maximizing two-part tariff, with one price for admission to ElvisLand and another price per ride for those who get in. How much should it charge per ride and how much for admission?

• A) $3 per ride and $7 for admission
• B) $0 per ride and $4 for admission
• C) $0 per ride and $11 for admission
• D) $3 per ride and $8 for admission
• E) $7 per ride and $7 for admission

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Definitions:

Prevent Dumping

Strategies or policies implemented to protect a country's domestic industry by limiting the importation of cheaply priced foreign goods.

Foreign Licensing

A business practice where a company allows another business in a different country to produce and sell its products under its brand.

International Production

Creating goods in multiple countries around the globe, often to minimize costs or maximize quality.

Direct Exporting

Direct exporting refers to the process by which a company sells its products directly to buyers in a foreign market without intermediaries.