Suppose That 1,000 People Are Interested in Attending ElvisLand

question 5

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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Definitions:

Mainstream Economists

Economists who adhere to widely accepted theories and models within the field, focusing on the analysis and understanding of economic phenomena.

Persistent Inflation

Sustained increase in the general price level of goods and services in an economy over a period of time.

Excessive Government Spending

The situation where government expenditures significantly exceed revenue, leading to budget deficits and potential economic issues.

Quantity of Money

The total amount of money available in an economy at a specific time, including currency, coins, and balances in bank accounts.