A movie monopolist sells to college students and other adults. The demand function for students is Q
Question:
A movie monopolist sells to college students and other adults. The demand function for students is
QdS=1,640−100P,QSd=1,640−100P,
and the demand function for other adults is
QdA=2,000−100P.QAd=2,000−100P.
Costs are
C(Q)=1Q+0.005Q2mper ticket,C(Q)=1Q+0.005Q2mper ticket,
where Q = QS + QA.
a. What prices will the monopolist set when she can discriminate?
Pstudent = $ per ticket.
Padult = $ per ticket.
Profit = $.
b. What if demand for adults increases to
QdA=2,200−100P?QAd=2,200−100P?
Pstudent = $ per ticket.
Padult = $ per ticket.
Profit = $.
c. When adult demand increases, the adult price:
increases. | |
does not change. | |
decreases. |
d. When adult demand increases, the student price:
increases. | |
does not change. | |
decreases. |