Question

Knoebels Amusement Park in Elysburg, Pennsylvania, charges a lump-sum fee, L, to enter its Crystal Pool. It also charges p per trip down a slide on the pool's water slides. Suppose that 350 teenagers visit the park, each of whom has a demand function of q1 6-p, and that 350 seniors also vist, each of whom has a demand function of q2 5-p. Knoebels's objective is to set L and p so as to maximize its profit given that it has no (non-sunk) cost and must charge both groups the same prices. What are the optimal L and p? The optimal L and p are L-and p- Enter numeric responses using real numbers rounded to three decimal places)

Answer 1

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