Question

Happyland is the only theme park in the nation.

   

The table sets out the demand schedule for passes and the cost schedule for running the theme park.

   

At the market​ equilibrium, no children under 10 years old visit the theme park.

   

Happyland offers children a discount of 50​ percent, which brings in more families.

   

This discount​ ______ consumer surplus and ​ ______ producer surplus.

A.

​decreases; increases

B.

​increases; increases

C.

​increases; decreases

D.

​decreases; decreases

Happyland is ▼ more/less(choose) efficient.

Quantity (passes per day) Total cost (dollars per Price (dollars per pass) 50 45 40 35 30 25 20 15 10 day) 1000 2500 4000 5500 7000 8500 10000 11500 13000 100 200 300 400 500 600 700 800

Answer 1

Answer : Option C i correct. As the discount has been avail in the market than this leads to the increase in the consumer surplus and decreases in the producer surplus which resulted in revenue has been decreased and profit declined.

Happy land is less efficient because now there output level has been increased but price decreases .As Marginal revenue has been decreased and output has been increased.