Question: Suppose moviegoers' demand functions are the same as in Worked-Out Problem 18.2, but marginal cost is instead $3 per ticket (instead of $2 per ticket,

Suppose moviegoers' demand functions are the same as in Worked-Out Problem 18.2, but marginal cost is instead $3 per ticket (instead of $2 per ticket, as in the Worked-Out Problem). What prices will the monopolist set when she can discriminate and when she can cannot? How will discrimination affect her profit?

Step by Step Solution

★★★★★

3.33 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

When she can discriminate the monopolist will set prices of P student 850 per ticket P adult 950 per ticket Profit 7250 When she cannot discriminate the monopolist will set prices of P everyone 900 pe... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

847-B-E-D-S (2996).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Verify the claims of the text about the welfare effect of discrimination in Figure 18.8. (The student demand function is QdA = 400 - 100P; the demand function of other adults and the monopolist's...

Suppose Joe and Rebecca engage in a repeated Cournot competition in which they can change their quantity decisions only once a year. The yearly demand function and costs are the same as in Worked-Out...

Exploring the Difference between Willingness to Pay and Willingness to Accept: Suppose you and I are identical in every way same exogenous income, same tastes over pizza and other goods. The only...

Suppose that the demand function of student moviegoers is the same as in Worked-Out Problem 18.2, but the demand function of other adults is instead QdA = 3000 - 100P. Marginal cost is still $2 per...

A movie monopolist sells to college students and other adults, as in Worked-Out Problem 18.2 (page 635). The demand function for students is QdS=2,00050P,=2,00050, and the demand function for other...

A movie monopolist sells to college students and other adults, as in Worked-Out Problem 18.2 (page 635). The demand function for students is QdS=2,00050P, and the demand function for other adults is...

A movie monopolist sells to college students and other adults, as in Worked-Out Problem 18.2 (page 635). The demand function for students is QdS=1,60025P,=1,60025, and the demand function for other...

this is the question Consider the model y = XB+E, where E(e|X) ==0 and V(e|X) = N. 1. Derive the expected value and covariance matrix of the estimator BaLs=(X'a'X)X'N'y. (1) 2. Consider the case...

Assist i dont know how to go about it Problem Set 6 1. (10 points) In Cambridge, shoppers can buy apples from two sources: a local orchard, and a store that ships apples from out of state. The...

Carter owns 1,200 shares of Echo Corporation stock. He purchased 400 shares of the stock on December 23, 2009, for $48,000, and the other 800 shares on October 31, 2010, for $84,000. On August 14,...

Felton Co. sells major household appliance service contracts for cash. The service contracts are for a 1-year, 2-year, or 3-year period. Cash receipts from contracts are credited to unearned service...

CHALLENGE Design an experiment. The previous two exercises illustrate the use of statistically designed experiments to answer questions that arise in everyday life. Select a question of interest to...

Ideal height of your mate. Refer to the Chance (Summer 2008) study of the height of the ideal mate, Exercise 9.33 (p. 540). The data were used to fit the simple linear regression model, E1y2 = b0 +...

Which of the following statements are true? Which are false? Explain why the false statements are untrue. a. More immigrants arrive to the United States each year illegally than legally. b. The...

In what respect is the economic decision to move across international borders an investment decision? Why do economic migrants move to some countries, but not to others? Cite an example of an...

Suppose initially that immigrant labor and native-born labor are complementary resources. Explain how a substantial immigration might change the demand for native-born workers, altering their wages....

The primary purpose of finance is to _ _ _ _ _ _ _ _ _ _ . a . ) keep track of a business's cash flow b . ) pay off debt as quickly as possible c . ) manage assets in a way that maximizes returns d ....

Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: All cash flows will occur in Erewhon and are expressed in dollars. In an attempt...

Question 2 (1 point) Mortgage Information: Initial Loan Amount: $100,000 Fully Amortizing Term: 30 years Fixed rate interest rate: 4.18% It is 5 years since this loan was originated -- what is the...