Suppose That 3,500 People Are Interested in Attending ElvisLand

question 17

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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