6. Price-discriminating firm Lucia owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists and touris and Lucia decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market The following graphs show demand (D) curves and marginal revenue (MR) curves for the two markets. Lucia's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 1 2 3 5 Market A MR 7 B 9 QUANTITY (Admission tickets per day) PRICE (Dollars per ticket) 10 Market B MR P 2 3 4 15 B 7 9 QUANTITY (Admission tickets per day) 8 10 Suppose that at first, Lucia charges the same price of $4 per admission in both markets so that the total number of admissions demanded is Suppose now that Lucia decides to charge a different price in each market. To maximize revenue, Lucia should charge S admission in Market A and S per admission in Market B. At these prices, she will sell a total quantity of tickets per day.. per 3 admission Complete the following table by calculating Lucia's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Price Policy Total Revenue Nondiscriminatory Discriminatory $ S high low Lucia charges a lower price in the market with a relatively low price elasticity of demand.
6. Price-discriminating firm Lucia owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists and touris and Lucia decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market The following graphs show demand (D) curves and marginal revenue (MR) curves for the two markets. Lucia's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 1 2 3 5 Market A MR 7 B 9 QUANTITY (Admission tickets per day) PRICE (Dollars per ticket) 10 Market B MR P 2 3 4 15 B 7 9 QUANTITY (Admission tickets per day) 8 10 Suppose that at first, Lucia charges the same price of $4 per admission in both markets so that the total number of admissions demanded is Suppose now that Lucia decides to charge a different price in each market. To maximize revenue, Lucia should charge S admission in Market A and S per admission in Market B. At these prices, she will sell a total quantity of tickets per day.. per 3 admission Complete the following table by calculating Lucia's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Price Policy Total Revenue Nondiscriminatory Discriminatory $ S high low Lucia charges a lower price in the market with a relatively low price elasticity of demand.
Chapter1: Making Economics Decisions
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Transcribed Image Text:6. Price-discriminating firm
Lucia owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists and tourist
and Lucia decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market
The following graphs show demand (D) curves and marginal revenue (MR) curves for the two markets. Lucia's marginal cost of providing admission
tickets is zero.
PRICE (Dollars per ticket)
Market A
MR
1
2 3 4 5 67 8 9 10
QUANTITY (Admission tickets per day)
(?)
PRICE (Dollars per ticket)
10
Market B
MR P
2
3
4 5 6 7
9
QUANTITY (Admission tickets per day)
8
10
Suppose that at first, Lucia charges the same price of $4 per admission in both markets so that the total number of admissions demanded is
Suppose now that Lucia decides to charge a different price in each market. To maximize revenue, Lucia should charge
admission in Market A and S
per admission in Market B. At these prices, she will sell a total quantity of
tickets per day..
per
3 admission
Complete the following table by calculating Lucia's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory
price policy.
Price Policy
Total Revenue
Nondiscriminatory
S
high
Discriminatory
S
low
Lucia charges a lower price in the market with a relatively low
price elasticity of demand.
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