Suppose the demand for tickets to the movie theater for adults is Pa = 150-qa and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Suppose the demand for tickets to the movie theater for adults is Pa = 150-qa and the demand for college students is pe = 100 - Assume MC = AC = 0. a) What is the profit maximizing pricing policy for the theater using third-degree price discrimination? b) What is the producer and consumer surplus under third-degree price discrimination? c) If the theater is unable to price discriminate and has to charge the same price for adults and college students, what would be the price and quantity sold for a ticket? d) What is the producer and consumer surplus with no price discrimination? e) Which policy results in a greater social welfare? Explain. Suppose the demand for tickets to the movie theater for adults is Pa = 150-qa and the demand for college students is pe = 100 - Assume MC = AC = 0. a) What is the profit maximizing pricing policy for the theater using third-degree price discrimination? b) What is the producer and consumer surplus under third-degree price discrimination? c) If the theater is unable to price discriminate and has to charge the same price for adults and college students, what would be the price and quantity sold for a ticket? d) What is the producer and consumer surplus with no price discrimination? e) Which policy results in a greater social welfare? Explain.
Expert Answer:
Answer rating: 100% (QA)
a The profit maximizing pricing policy for the theater using thirddegree price discrimination is to charge separate prices for adults and college students The profit maximizing price for adults would ... View the full answer
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
Posted Date:
Students also viewed these finance questions
-
Magdalena Schmitz has undergone %nine major changes in her life recently. In 2015, at the age of 46, her husband. Roger. passed assay Magdalena in Pittsburgh remarried as of the end of 2017....
-
Complete the 2019 federal income tax return for Sarah Hamblin. Be sure to include only required tax forms when completing the tax return. For purposes of this assignment, unless instructed otherwise,...
-
Complete the 2019 federal income tax return for the Davis family. Ignore the requirement to attach the form(s) W-2 to the front page of the Form 1040. If required information is missing, use...
-
1 30 2 3 4 If A= = -1 2 1,B= 1 23 0 02 -1 1 2 5 9 13 (a) -1 2 4 -12 4 1 24 (C) -1 2 4 -2 24 then AB= 5 (b) -1 9 13 24 -2 2 4 (d) None of these
-
1. What are two main concerns that MNCs should evaluate when doing business in Russia? 2. How can MNCs protect themselves from government action? 3. What proactive political strategies might help...
-
Before a gasoline-powered engine is started, water must be drained from the bottom of the fuel tank. Suppose the tank is a right circular cylinder on its side with a length of 2 ft and a radius of 1...
-
Consider unsteady flow in the constant diameter, horizontal pipe shown in Fig. P5.67. The velocity is uniform throughout the entire pipe, but it is a function of time: \(\mathbf{V}=u(t)...
-
Refer to Problem 17.10 and develop a set of tables to implement the REA diagram you developed for Stans Southern Barbeque Supply Store. Identify the primary and foreign keys for each table, and dont...
-
If you worked for one of the oil companies and were tasked to negotiate an oil contract with the Nigerian government, how would you go about it? What would you recommend your company do? Why?
-
Siya Dlamini is a partner at a law firm. He is 4 0 years old and unmarried. He has incurred a number of expenses during the 2 0 2 3 year of assessment. He would like to know if they are deductible in...
-
1. Sheffield Enterprises payroll for the month of March, 2020 is shown below. Salaries and Wages for the month of March 2020 $ 214,000 Income Taxes withheld from employees 47,372 EI withheld from...
-
There are two reasons the yield of a defaultable bond exceeds the yield of an otherwise identical default-free bond. What are they?
-
Under what conditions can we evaluate a project using the firms weighted average cost of capital?
-
Explain why two coupon bonds with the same maturity may each have a different yield to maturity.
-
When choosing between alternatives, what cash flows can be ignored?
-
If investors attempt to buy a stock with a positive alpha, what is likely to happen to its price and expected return? How will this affect its alpha?
-
Standard Costing - Variance Analysis - H.O#2 Q.1:- The standard mix for producing 8,000 bottles of Product-X is as follows; Material: A Material: B from an input of: 1,000 liters 2,000 liters Re....
-
What impact has the Internet had on the globalization of small firms? How do you think small companies will use the Internet for business in the future?
-
Freda acquired a passive activity this year for $870,000. Gross income from operations of the activity was $160,000. Operating expenses, not including depreciation, were $122,000. Regular income tax...
-
Asok's AGI for 2014 is $133,050. Included in this AGI is a $45,000 25% long-term capital gain and a $13,000 0%/15%/20% long-term capital gain. Asok is single, uses the standard deduction, and has...
-
Partin, Inc., a foreign subsidiary of Jones, Inc., a U.S. corporation, reports pretax income of 200,000 euros for the current year. Partin accrues 60,000 euros in foreign taxes on this income. The...
-
The payments set out in Table 9.9 have been made during the year in relation to a non-current asset bought at the beginning of the year. What cost figure should be used as the basis for the...
-
Outline three different depreciation methods and appraise them in the context of the definition and objectives of depreciation.
-
The following actual and estimated figures are available. Based on these figures, evaluate the following. a. Calculate annual depreciation under the straight-line method. b. Calculate the...
Study smarter with the SolutionInn App