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NH 2015 is the only amusement park in Goleta (it has monopoly power). The owners have decided to enact a two-part tariff: a fixed fee to enter and a per-photo price to get a photo taken with local celebrity Serena. Suppose that the demand for photos is , and that NH 2015's cost function is . If the owners choose the fixed fee and per-photo price to maximize profits, what will the profits be

Respuesta :

Answer:

The profits will be "24.5".

Explanation:

As we know,

Monopoly Power, [tex]MC=\frac{dC(q)}{dq}[/tex]

                                      [tex]=11[/tex]

Withe either two-part tariff,

P = MC

and,

Profit = CS (Costumer surplus)

Now,

[tex]p=18-q=11[/tex]

and, [tex]q = 7[/tex]

When,

q = 0 and p = 18

Profit = [tex](\frac{1}{2})\times (18-11)\times 7[/tex]

⇒       = [tex]\frac{1}{2}\times 7\times 7[/tex]

⇒       = [tex]\frac{1}{2}\times 49[/tex]

⇒       = [tex]24.5[/tex]

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