The Cirque de L economie is the only Circus in the small rural town of Boomerton. This
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Question:
(a) (5 points) If Cirque de L’ ́economie wanted to charge a single price for all consumers, what is the aggregate demand they will face?
(b) (5 points) What is the profit-maximizing number of tickets for the Circus to sell if it charges a single price? What would the profits be? How many tickets would be sold to seniors and non-seniors, respectively?
(c) (10 points) Suppose that the Circus wants to increase its profits by engaging in price discrimination. Given the information provided, what type of price discrimination would the Circus engage in? What prices would the Circus charge? What would the profits be in this setting?
Related Book For
Physics
ISBN: 978-0077339685
2nd edition
Authors: Alan Giambattista, Betty Richardson, Robert Richardson
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