You have been commissioned to estimate the demand curve for admission toEuroLand, an amusement park in France. To do this, you spend a day surveying visi-tors to the park. Before doing this, you divide the area around the park into 10 zoneswith the distance from the park approximately constant within a zone. You ask eachperson you interview where they come from. Based on that information, and figureson annual attendance at the park, you are able to calculate the annual number of visi-tors from each zone. Your data are shown below:Number ofvisitorsDistance fromZonal populationpark (km)Zone5005,00010110,0009002022,00025,00030370010,0004046,000100,0005025,000500,0006068,000200,00070750,0001,5008082,000100,0009091,000100,00010010You note that admission to EuroLand is 150 euros per person. You also calculatehat transportation costs, including time costs, are approximately 1/2 euro per personber kilometer in each direction. Ignore the value of time in the parkCalculate the demand curve for visits to EuroLand, showing visits as a function ofhe entry price. How many fewer visitors would you expect there to be if the manage-nent raised the admission fee to 200 euros?

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It's in environmental economic textbook, kolstad.

You have been commissioned to estimate the demand curve for admission to
EuroLand, an amusement park in France. To do this, you spend a day surveying visi-
tors to the park. Before doing this, you divide the area around the park into 10 zones
with the distance from the park approximately constant within a zone. You ask each
person you interview where they come from. Based on that information, and figures
on annual attendance at the park, you are able to calculate the annual number of visi-
tors from each zone. Your data are shown below:
Number of
visitors
Distance from
Zonal population
park (km)
Zone
500
5,000
10
1
10,000
900
20
2
2,000
25,000
30
3
700
10,000
40
4
6,000
100,000
50
25,000
500,000
60
6
8,000
200,000
70
7
50,000
1,500
80
8
2,000
100,000
90
9
1,000
100,000
100
10
You note that admission to EuroLand is 150 euros per person. You also calculate
hat transportation costs, including time costs, are approximately 1/2 euro per person
ber kilometer in each direction. Ignore the value of time in the park
Calculate the demand curve for visits to EuroLand, showing visits as a function of
he entry price. How many fewer visitors would you expect there to be if the manage-
nent raised the admission fee to 200 euros?
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You have been commissioned to estimate the demand curve for admission to EuroLand, an amusement park in France. To do this, you spend a day surveying visi- tors to the park. Before doing this, you divide the area around the park into 10 zones with the distance from the park approximately constant within a zone. You ask each person you interview where they come from. Based on that information, and figures on annual attendance at the park, you are able to calculate the annual number of visi- tors from each zone. Your data are shown below: Number of visitors Distance from Zonal population park (km) Zone 500 5,000 10 1 10,000 900 20 2 2,000 25,000 30 3 700 10,000 40 4 6,000 100,000 50 25,000 500,000 60 6 8,000 200,000 70 7 50,000 1,500 80 8 2,000 100,000 90 9 1,000 100,000 100 10 You note that admission to EuroLand is 150 euros per person. You also calculate hat transportation costs, including time costs, are approximately 1/2 euro per person ber kilometer in each direction. Ignore the value of time in the park Calculate the demand curve for visits to EuroLand, showing visits as a function of he entry price. How many fewer visitors would you expect there to be if the manage- nent raised the admission fee to 200 euros?

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Expert Answer

Step 1

suppose,

The admission to euro land = 150 euros per person.

Transportation cost including time cost= 1/2 (0.5) euro per person.

Increased admission fee by the management = 200 euros.

We can calculate the number of fewer visitors as follows.

Step 2

If the total distance of the 10 zones are 20,40, 60, …, 200 respectively, the total transportation

Cost per visitor can be calculated as follows.

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Total transpotaion cost Costx Distance =0.5x20 =10

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Step 3

Using the same equation, we can calculate the transportat...

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0.5x20 10 0.5x40 20 0.5x60 30 0.5x200 100

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