1880 Town is a tourist attraction in Midland, SD. Owners of this attraction have collected buildings built between 1880 and 1920, filled them with antique furniture and collectibles, and charge admission for tourists to experience history. Because of the exclusivity and location 1880 Town, this tourist attraction enjoys a measure of monopoly power.
Suppose you run a tourist attraction similar to 1880 Town. After running some tests with pricing, you have formulated a daily demand schedule for admission as given. In addition to tracking demand at various price levels, you also monitor costs closely.
a) Using the demand schedule provided, find total revenue and marginal revenue at each point.
b) Using total costs, find marginal costs at each point. (Just as marginal revenue is the change in total revenue divided by a change in Q, marginal cost is the change in total cost divided by a change in Q.)
c) How much should you charge for entrance to the tourist attraction and how many visitors do you expect to have?
d) What is profit at this point?
In spite of the possible motivation and challenges, Rome did see benefits from expansion. The most obvious benefit was the accumulation of large amounts of territory, increasing the reach of Roman power, taxation, and cultural influence. Expansion also lead to infrastructural innovation such as the implementation of a new sewer system and an aqueduct that allowed for the actual city itself to expand and for the quality of life to improve for all classes. By the time of the second century Rome was accumulating massive wealth through taxation and resources from the territories they acquired. This lead to the creation of a new bourgeoisie upper middle class called the equestrians; wealth and property were now no longer exclusively reserved for only the aristocracy and nobility. This new class, as well as the honor and fame associated with successful soldiers in war allowed for mobility between classes that was not commonly seen before. This mobility also allowed for equestrians to become publicans, a political position in which they are responsible for managing a province within the Roman Empire. Class mobility is significant because it creates a better standard of life for citizens of Rome and gave rise to many prominent political figures such as Cato the Elder who were able to rise from a lower class. This mobility was often due to military success, creating a larger and lengthier reward to being apart of the military. As discussed previously, the army held many severe consequences for those who failed or betrayed them, but equally grand rewards for those who are successful. Polybius writes, “For the rest of their lives, the men who were saved revere their rescuers like fathers and feel obliged to serve them in every way, as a son would a father. These incentives inspire not only those present in the ranks but also those back home to strive to outdo each other on the battlefield.” (Polybius 377) This passage indicates the social reward such as fame and glory, as well as the tangible rewards such as weaponry and wealth that awaited soldiers that were successful. Men like Cato the Elder were able to use this fame and success from the military to become politicians and hold great sway over the Roman Empire.