The city of Winnipeg is considering whether to build a new public ice rink. This rink wouldhave a capacity of 800 ice skaters per day, and the proposed admission fee is $6 perindividual per day. The estimated cost of the ice rink, averaged over the life of the rink, is$4 per ice skater per day.The city of Winnipeg has hired you to assess this project. Fortunately, Ottawa already hasan ice rink, and the city of Ottawa has randomly varied the price of that rink to find howprice affects usage. The results from their study follow:Ice rink price Number of ice skatersper day$8$10$4$6$2per day50020011008001400a. If the ice rink is built as planned, what would be the net benefit per day from the icerink? What is the consumer surplus for ice skaters?b. Given this information, is an 800-ice rink the optimally sized ice rink for Winnipeg tobuild? Explain.

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Answered: The city of Winnipeg is considering…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter5: Network Models

Section5.3: Assignment Models

Problem 10P

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