Industrial Economy Questions
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages
A catering monopoly runs 10 restaurants in the National Park. The park attracts V = 650 visitors a day and employs E = 49 people. All visitors eat only one meal at a randomly chosen restaurant and, because they are on vacation, are willing to pay up to €12 for that meal. The employees also eat only one meal a day, but at the cheapest restaurant and only if the meal costs no more than €5.
- Show that if the monopoly´s MC is constant at €2 per meal, its optimal pricing policy is such that no employee ever eats at the restaurants.
- How far would the number of visitors per day have to drop for patronage by the employees to become interesting to the monopoly?