Suppose That 2,000 People Are Interested in Attending ElvisLand

question 14

Multiple Choice

Suppose that 2,000 people are interested in attending ElvisLand. Once a person arrives at ElvisLand, his or her demand for rides is given by x = max{ 5 - p, 0) , where p is the price per ride. There is a constant marginal cost of $2 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) $2 per ride and $5 for admission
• B) $2 per ride and $4.50 for admission
• C) $0 per ride and $3 for admission
• D) $0 per ride and $6.50 for admission
• E) $5 per ride and $5 for admission

Explain the role of resource prices and costs of production in determining the slope of the short-run aggregate supply curve.

Analyze equilibrium conditions in the aggregate demand and aggregate supply model.

Understand the concept of market risk, including how beta measures the sensitivity of a stock's returns to market movements.

Comprehend the benefits of diversification in reducing investment risk.

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