ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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The town council of Frostbite, Ontario, is trying to decide whether to build an outdoor skating rink which would cost $1.2 million and last for only one season. Operating costs would be zero. Yearly passes would be sold to anyone who wanted to use the rink. If p is the
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a. revenues won’t cover construction costs at any ticket price. There is no way to increase total
b.if the rink is built and price is set to maximize profits, the town makes a profit and consumers will be better off.
c.if the rink is built and price is set to maximize profits, the town makes a profit but consumers are worse off than without a rink.
d.there is no price at which ticket revenues cover costs but the total consumer surplus from the rink exceeds costs.
e.None of the above.
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