An amusement park, that has a customer set made up of two markets - adults and children - has identied the following demand schedules for admission: Price ($) Quantity, Adults Quantity, Children
5 15 20
6 14 18
7 13 16
8 12 14
9 11 12
10 10 10
11 9 8
12 8 6
13 7 4
14 6 2

The marginal operating cost of each unit of quantity is $5.

1. Calculate the price, quantity, and profit for each segment if the amusement park charges a different price in each market. (Hint: calculate profit at each price in the adult market, then in the child market, and choose profit maximizing in each.)

a. Adult market price (in dollars):
b. Adult market quantity:
c. Adult market profit (in dollars):
d. Child market price (in dollars):
e. Child market quantity:
f. Child market profit (in dollars):
g. Total profit (adult + child, in dollars):

2. Calculate the price, quantity, and profit if the amusement park charges the same price in the two markets combined. (Hint: Add adult and child quantities together, and treat this total and the entire market quantity at each price.)

a. Market price (in dollars):
b. Quantity (child + adult at this price):
c. Profit:

3. Is profit higher, lower, or the same when the market is split with different prices for adults and for children?

a. Higher profit with split pricing
b. Lower profit with split pricing
c. Same profit with split pricing
d. Cannot determine with the information available