Transcribed Image Text:2. A ski resort faces daily demand given by p = a – Q, where a varies from day to day. Over a three-
day period, a takes on the values 80.100, and 120. The marginal cost is zero. The fixed cost for the
three-day period is $2500. If the firm uses dynamic pricing, it changes its price every day to
maximize profit. If it uses non-dynamic pricing, it sets the same price for all three days, assuming that
a takes on its average value of 100 each day. Calculate the consumer surplus and the firm’s profit over
the three-day period under each pricing approach.
day period, a takes on the values 80.100, and 120. The marginal cost is zero. The fixed cost for the
three-day period is $2500. If the firm uses dynamic pricing, it changes its price every day to
maximize profit. If it uses non-dynamic pricing, it sets the same price for all three days, assuming that
a takes on its average value of 100 each day. Calculate the consumer surplus and the firm’s profit over
the three-day period under each pricing approach.
