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Fun Water Park is considering practicing price discrimination in respect of its customers who are either members or non-members. Assume that the marginal cost (MG) for both groups of customers is constant. The Figure Q3(a) and Q3(b) shows the markets for the Fun Water Park. RM/ RM/ Cost Cost 150 100 100 80 50 MC 50 MC `AR1 MR ARI MRI 10 20 40 Quantity 10 30 50 Quantity Q3(b): Figure members market Figure Q3(a): Members market non- i) Determine the price and quantity to profit maximizing in each market. ii) Calculate the profit for both members market, and non-members market, given that MC is equal to AC.

Fun Water Park is considering practicing price discrimination in respect of its customers who are either members or non-members. Assume that the marginal cost (MG) for both groups of customers is constant. The Figure Q3(a) and Q3(b) shows the markets for the Fun Water Park. RM/ RM/ Cost Cost 150 100 100 80 50 MC 50 MC `AR1 MR ARI MRI 10 20 40 Quantity 10 30 50 Quantity Q3(b): Figure members market Figure Q3(a): Members market non- i) Determine the price and quantity to profit maximizing in each market. ii) Calculate the profit for both members market, and non-members market, given that MC is equal to AC.

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter24: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 13CQ
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Fun Water Park is considering practicing price discrimination in respect of its customers who are either members or non-members. Assume that the marginal cost (MG) for both groups of customers is constant. The Figure Q3(a) and Q3(b) shows the markets for the Fun Water Park. RM/ Cost RM/ Cost 150 100 100 80 MC 50 MC 50 ARI MR `ARI MRI 10 20 40 Quantity 10 30 50 Quantity Figure Q3(a): Members market Q3(b): Figure members market non- i) Determine the price and quantity to profit maximizing in each market. ii) Calculate the profit for both members market, and non-members market, given that MC is equal to AC.
Transcribed Image Text:Fun Water Park is considering practicing price discrimination in respect of its customers who are either members or non-members. Assume that the marginal cost (MG) for both groups of customers is constant. The Figure Q3(a) and Q3(b) shows the markets for the Fun Water Park. RM/ Cost RM/ Cost 150 100 100 80 MC 50 MC 50 ARI MR `ARI MRI 10 20 40 Quantity 10 30 50 Quantity Figure Q3(a): Members market Q3(b): Figure members market non- i) Determine the price and quantity to profit maximizing in each market. ii) Calculate the profit for both members market, and non-members market, given that MC is equal to AC.
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