Assume that the theme park owner invested in expanding his park so that he could accommodate up to 1,500 customers each day. The theme park still charges a single admission price, and all rides are free after admission. During summer, demand follows a stable and predictable pattern with higher demand on weekends. The demand curves are linear and their parameters are given below:
| Day of week |
Intercept (Di) |
Slope (mi) |
| Sunday |
3,100 |
-62 |
| Monday |
1,500 |
-50 |
| Tuesday |
1,400 |
-40 |
| Wednesday |
1,510 |
-42 |
| Thursday |
2,000 |
-52.6 |
| Friday |
2,500 |
-55,6 |
| Saturday |
3,300 |
-60 |
a) What single-price policy would maximize his total revenue, assuming he faces independent demands for each day? What is his corresponding attendance and revenue per day?
b) Under the same assumptions, what would be the variable prices he should charge for each day to maximize expected revenue, and what are the corresponding attendance and revenue per day?