Question: Ticket Price, Cost ($) 10 DA DJ = D. + DA 4 MC = ATC MC = ATC MR. 20 20 28 38 Children's 10


Ticket Price, Cost ($) 10 DA DJ = D. + DA 4 MC = ATC MC = ATC MR. 20 20 28 38 Children's 10 Adult Tickets Tickets1. The Figure above describes demand and cost conditions facing the Salinas Cinema-Plex. Note that marginal costs are constant ($). The demand for Cinema-Plex movie tickets by adult patrons is given by DA and by child patrons DK. o) Calculate total revenue from ticket sales IF the Cinema-Plex did NOT practice 3rd degree price discrimination, but rather charged a single price to adult and child patrons. b) Calculate the total number of tickets sold if the Cinema-Plex DID practice 3rd degree price discrimination. c) Calculate the change in consumer surplus (CS) received by adult patrons if the Cinema-Plex shifted from a single price to a 3'd degree price discrimination regime. d) How much (economic) profit does the Cinema-Plex stand to gain by engaging in 3'd degree price discrimination
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
