Big Waves is a large water park. Suppose the individual demand for entrance into Big Waves is Qd = 50 - (2 × P)and each consumer has the same demand. Big Waves has a constant marginal cost of
$5 per consumer. If Big Waves practices two- part pricing and requires a membership fee and then a separate entrance fee, what is the profit- maximizing membership fee?
A)$200
B)$125
C)$50
D)$400

Question

Quizplus · Accepted Answer

The Answer of Big Waves is a large water park. Suppose the individual demand for entrance into Big Waves is Qd = 50 - (2 × P)and each consumer has the same demand. Big Waves has a constant marginal cost of
$5 per consumer. If Big Waves practices two- part pricing and requires a membership fee and then a separate entrance fee, what is the profit- maximizing membership fee?
A)$200
B)$125
C)$50
D)$400

Big Waves Is a Large Water Park