Disney operates two theme parks in California: Disneyland and California Adventure. Disney has long charged the same price for the two parks, currently $400 per day for a four-person family. However with fewer tourists and more local visitors over the past year, Disney is considering park-specific pricing along with a “weekender” bundle. Disney media have different appeal to boys and girls, which affects demand for theme parks. Disney estimates demand for three family types: Boy (B), Girl (G) and Mixed (M). Each family buys at most one ticket of each type, and there are 1 million families of each type each month. Maximum willingness to pay for each park for each family is shown in the table below. Assume the marginal cost per family per park is $150. Family Type Disneyland (DL) CA Adventure (CA) Bundle G $700 $200 $900 M $300 $300 $600 B $200 $500 $700 Cost = $150 per family per park a. What are the profit-maximizing prices for Disneyland and California Adventure if tickets are sold separately? How many families visit each park at this price, and what are firm profits? PDL=? QDL=? PCA=? QCA=? Profit =?
Disney operates two theme parks in California: Disneyland and California Adventure. Disney has long charged the same price for the two parks, currently $400 per day for a four-person family. However with fewer tourists and more local visitors over the past year, Disney is considering park-specific pricing along with a “weekender” bundle. Disney media have different appeal to boys and girls, which affects demand for theme parks. Disney estimates demand for three family types: Boy (B), Girl (G) and Mixed (M). Each family buys at most one ticket of each type, and there are 1 million families of each type each month. Maximum willingness to pay for each park for each family is shown in the table below. Assume the marginal cost per family per park is $150. Family Type Disneyland (DL) CA Adventure (CA) Bundle G $700 $200 $900 M $300 $300 $600 B $200 $500 $700 Cost = $150 per family per park a. What are the profit-maximizing prices for Disneyland and California Adventure if tickets are sold separately? How many families visit each park at this price, and what are firm profits? PDL=? QDL=? PCA=? QCA=? Profit =?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter12: More Realistic And Complex Pricing
Section: Chapter Questions
Problem 9MC: After running a promotional campaign, the owners of a local hardware store decided to decrease the...
Related questions
Question
Disney operates two theme parks in California: Disneyland and California Adventure. Disney has long charged the same price for the two parks, currently $400 per day for a four-person family. However with fewer tourists and more local visitors over the past year, Disney is considering park-specific pricing along with a “weekender” bundle. Disney media have different appeal to boys and girls, which affects demand for theme parks. Disney estimates demand for three family types: Boy (B), Girl (G) and Mixed (M). Each family buys at most one ticket of each type, and there are 1 million families of each type each month. Maximum willingness to pay for each park for each family is shown in the table below. Assume the marginal cost per family per park is $150.
Family Type Disneyland (DL) CA Adventure (CA) Bundle
G $700 $200 $900
M $300 $300 $600
B $200 $500 $700
Cost = $150 per family per park
a. What are the profit-maximizing prices for Disneyland and California Adventure if tickets are sold separately? How many families visit each park at this price, and what are firm profits?
PDL=?
QDL=?
PCA=?
QCA=?
Profit =?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning