Question

Supposing Disney World is considering franchising its Disney land to interested investors in Emerald Park which is 5 miles long. Disney World estimates that the daily average number of visitors N will be 2,000 for variety of attractions and that each visitor will buy one pass per day provided that the price plus the commuting cost does not exceed $10. Each visitor incurs fixed cost of $100 per day. Answer the following questions: commuting cost c of S1 for every half mile. Disney World incur a cost of $0.50 per pass and a a) Where should Disne y land be located in Emerald Park? What price should the franchise b) Use a suitable diagram to illustrate the location of the franchise, the visitors and the price c) Assume the franchise acts like a monopoly and restrict output, determine the charge to provide service to all the visitors? Calculate the profit. it will charge monopolist's profit maximization price and quantity.

Answer 1

Answer:

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