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 the amusement park can levy on consumers whose demand curve is D₁?

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 the amusement park can levy on consumers whose demand curve is D₁?

Quizplus · Accepted Answer

To determine the maximum cover charge that the amusement park can levy on consumers whose demand curve is D₁, we need to find where the demand curve intersects the marginal cost curve ($3) and then read the corresponding price on the demand curve. From the graph, we can see that the intersection point is at a quantity of 6, which corresponds to a price of $18 on demand curve D₁. Therefore, the maximum cover charge that the amusement park can levy on consumers whose demand curve is D₁ is $18.

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