Sub: Economics Topic: Micro Economics
Question:
The profit maximizing price and quantity in each market when a the zoo
decides to price discriminate
ClassOf1 provides exert guidance for College, Graduate and High school homework and live online tutoring on subjects like
Finance, Marketing, Statistics, Economics and others. Check out more solved problems in our Solution Library.
The local zoo has hired you to assist them in setting admission prices. The zoo’s managers
recognize that there are two distinct demand curves for zoo admission. One demand curve
applies to those adults whose ages range from 12 to 64:
PA = 9.6 – 0.08QA, where PA = adult price and QA = daily quantity of adults.
The other demand curve is for children and senior citizens:
PCS = 4 – 0.05QCS, where PCS = children’s/senior citizen’s price, and QCS = daily
quantity of children and senior citizens.
Crowding is not a problem at the zoo, so that the managers consider marginal cost to be zero.
If the zoo decides to price discriminate, what are the profit maximizing price and
quantity in each market?
Solution:
The local zoo has hired you to assist them in setting admission prices. The zoo’s
managers recognize that there are two distinct demand curves for zoo admission. One
demand curve applies to those adults whose ages range from 12 to 64:
PA = 9.6 – 0.08QA, where PA = adult price and QA = daily quantity of adults.
The other demand curve is for children and senior citizens:
PCS = 4 – 0.05QCS, where PCS = children’s/senior citizen’s price, and QCS =
www.classof1.com
*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting the same in
lieu of your academic submissions for grades.

Sub: Economics Topic: Micro Economics
daily quantity of children and senior citizens.
Crowding is not a problem at the zoo, so that the managers consider marginal cost to be
zero.
If the zoo decides to price discriminate, what are the profit maximizing price
and quantity in each market?
Adult market (ages range from 12 to 64)
PA = 9.6 – 0.08QA
Q= QA+QCS
PCS= 4 – 0.05QCS
MC=0
TRA= 9.6QA- 0.08QA2
MRA= 9.6 – 0.16QA
MCA=0
Substituting MR=MC we get,
9.6 – 0.16QA =0
9.6= 0.16QA
QA=60
If you like to download the complete solution for free, visit our solution
library by copying to your browser the following link
ClassOf1 provides exert guidance for College, Graduate and High school homework and live online tutoring on subjects like
Finance, Marketing, Statistics, Economics and others. Check out more solved problems in our Solution Library.
www.classof1.com
*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting the same in
lieu of your academic submissions for grades.