You are the manager of the local movie theatre in a small town. Running a movie has a fixed cost of $2,000, but selling an extra ticket (i.e. accommodating an extra viewer) has zero marginal cost. Below are the demand schedules for your two types of customers: Price $ Adults Teens and Seniors 10 50 100 200 7 200 50 300 100 5 350 150 4 400 200 3 400 300 2 400 300 1 400 300 If you are to charge a single price (i.e., if price discrimination is prohibited), what price would you set for a ticket to maximize profit? How much profit do you make? Price = $ Profit = $ If you were allowed to price-discriminate, what price would you charge for an adult ticket? For senior/teen ticket? How much profit do you make? Price for adults = s Price for seniors/teens= $ Profit = $
You are the manager of the local movie theatre in a small town. Running a movie has a fixed cost of $2,000, but selling an extra ticket (i.e. accommodating an extra viewer) has zero marginal cost. Below are the demand schedules for your two types of customers: Price $ Adults Teens and Seniors 10 50 100 200 7 200 50 300 100 5 350 150 4 400 200 3 400 300 2 400 300 1 400 300 If you are to charge a single price (i.e., if price discrimination is prohibited), what price would you set for a ticket to maximize profit? How much profit do you make? Price = $ Profit = $ If you were allowed to price-discriminate, what price would you charge for an adult ticket? For senior/teen ticket? How much profit do you make? Price for adults = s Price for seniors/teens= $ Profit = $
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter6: Simple Pricing
Section: Chapter Questions
Problem 7MC
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Question
![You are the manager of the local movie theatre in a small town. Running a movie has a fixed cost of $2,000, but selling an extra
ticket (i.e. accommodating an extra viewer) has zero marginal cost. Below are the demand schedules for your two types of
customers:
Price $
Adults
Teens and Seniors
10
50
9
100
8
200
7
200
50
6
300
100
5
350
150
4
400
200
3
400
300
400
300
1
400
300
If you are to charge a single price (i.e., if price discrimination is prohibited), what price would you set for a ticket to maximize profit?
How much profit do you make?
Price = $
Profit = $
If you were allowed to price-discriminate, what price would you charge for an adult ticket? For senior/teen ticket? How much profit
do you make?
Price for adults = $
Price for seniors/teens= $
Profit = $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa4c42f8b-24e9-44c4-b451-1908d7e4455e%2Fc36f5943-b1e0-45c8-9324-2e049ae2e90d%2F51t6dwh_processed.png&w=3840&q=75)
Transcribed Image Text:You are the manager of the local movie theatre in a small town. Running a movie has a fixed cost of $2,000, but selling an extra
ticket (i.e. accommodating an extra viewer) has zero marginal cost. Below are the demand schedules for your two types of
customers:
Price $
Adults
Teens and Seniors
10
50
9
100
8
200
7
200
50
6
300
100
5
350
150
4
400
200
3
400
300
400
300
1
400
300
If you are to charge a single price (i.e., if price discrimination is prohibited), what price would you set for a ticket to maximize profit?
How much profit do you make?
Price = $
Profit = $
If you were allowed to price-discriminate, what price would you charge for an adult ticket? For senior/teen ticket? How much profit
do you make?
Price for adults = $
Price for seniors/teens= $
Profit = $
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