If you pay a fixed price to enter a theme park, allowing you to ride as many rol

Q: If you pay a fixed price to enter a theme park, allowing you to ride as many rol

(C) option. According to marginal analysis, you should ride until the additional benefit of the last ride equals the admission price you paid to enter the park.

ID: 1145373 • Letter: I

Question

If you pay a fixed price to enter a theme park, allowing you to ride as many roller coasters as you want, how many should you ride according to marginal analysis?

a) You should ride as many times as you possibly can to reduce the average cost per ride.
b) You should ride until the last ride provides no additional benefit.
c) You should ride until the additional benefit of the last ride equals the admission price you paid to enter the park.
d) You should ride only if the theme park does not charge admission at all.

Explanation / Answer

According to marginal analysis, you should ride until the additional benefit of the last ride equals the admission price you paid to enter the park.

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