Suppose That 1,000 People Are Interested in Attending ElvisLand

question 19

Multiple Choice

Suppose that 1,000 people are interested in attending ElvisLand. Once a person arrives at ElvisLand, his or her demand for rides is given by x = max{ 6 - p, 0} , where p is the price per ride. There is a constant marginal cost of $3 for providing a ride at ElvisLand. If 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 $6 for admission
• B) $3 per ride and $4.50 for admission
• C) $0 per ride and $3 for admission
• D) $0 per ride and $7.50 for admission
• E) $6 per ride and $6 for admission

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Cash

Liquid assets that can be used immediately for transactions, including currency and bank balances.

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Interest computed not only on the original amount invested or loaned but also on the interest that has been added to this principal over past periods.

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Revenue generated from a person's job, investments, or business operations, excluding capital gains or gifts.