The following figure represents two types of demand curves, of two sets of consumers visiting an amusement park.$3 is the marginal cost of providing the service.

-Refer to Figure .What is the maximum cover charge that can be levied on consumers whose demand curve is D₂?

Question

The following figure represents two types of demand curves, of two sets of consumers visiting an amusement park.$3 is the marginal cost of providing the service.

-Refer to Figure .What is the maximum cover charge that can be levied on consumers whose demand curve is D₂?

Quizplus · Accepted Answer

The maximum cover charge is determined by the consumer surplus, which is the area between the demand curve D₂ and the price axis up to the quantity consumed. The highest price consumers are willing to pay is $28, which is the intercept of D₂ on the price axis.

The Following Figure Represents Two Types of Demand Curves, of Two