As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie heaters. On weekends, the inverse demand function is P= 20 – 0.001Q, on weekdays, it is P= 15 – 0.002Q. You acquire legal rights rom movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 “royalty" for each moviegoer entering your heaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case? O Third degree price discrimination O Block pricing O First degree price discrimination O Second degree price discrimination What price should you charge on weekends?

As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P = 30 -0.002Q; on weekdays, it is P= 22 -0.002 Q. You acquire legal rights from movie producers to show their films at a cost of $30,000 per movie, plus a $3.50 "royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case? O Block pricing O First degree price discrimination O Second degree price discrimination Ⓒ Third degree price discrimination What price should you charge on weekends? Instructions: Enter your response rounded to two decimal places. $ What price should you charge on weekdays? Instructions: Enter your response rounded to two decimal places. $

You are an executive for Super Computer, Inc. (SC), which rents out super computers. SC receives a fixed rental payment per time period in exchange for the right to unlimited computing at a rate of P cents per second. SC has two types of potential customers of equal number-10 businesses and 10 academic institutions. Each business customer has the demand function Q = 10 - P, where Q is in millions of seconds per month; each academic institution has the demand Q = 8-P. The marginal cost to SC of additional computing is 2 cents per second, regardless of volume. a. Suppose that you could separate business and academic customers. What rental fee and usage fee would you charge each group? What would be your profits? b. Suppose you were unable to keep the two types of customers separate and charged a zero rental fee. What usage fee would maximize your profits? What would be your profits? c. Suppose you set up one two-part tariff-that is, you set one rental and one usage fee that both business…

Suppose a firm faces an identical inverse demand curve of p = 100 - q for each consumer in the market. Currently, the firm's average cost = marginal cost = $40. Determine the profit-maximizing price and identical lump-sum fee to charge with a two-part tariff. The profit-maximizing price to charge is $ (Enter a numeric response using a real number rounded to two decimal places.)

Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p = 140-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $40, which is the marginal cost his round imposes on the Club. Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is p = 120-2q. The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than in Joe's original…

Joe has just moved to a small town with only one golf course, the Northlands Golf Club. His inverse demand function is p=140-2q, where q is the number of rounds of golf that he plays per year. The manager of the Northlands Club negotiates separately with each person who joins the club and can therefore charge individual prices. This manager has a good idea of what Joe's demand curve is and offers Joe a special deal, where Joe pays an annual membership fee and can play as many rounds as he wants at $20, which is the marginal cost his round imposes on the Club. Joe marries Susan, who is also an enthusiastic golfer. Susan wants to join the Northlands Club. The manager believes that Susan's inverse demand curve is p=120-2q. The manager has a policy of offering each member of a married couple the same two-part prices, so he offers them both a new deal. What two-part pricing deal maximizes the club's profit? Will this new pricing have a higher or lower access fee than in Joe's original deal?…

Suppose a local supermarket runs a discount campaign on the sales of shampoos using discount coupons – any customer who shows a discount coupon will be offered an 20% discount on the original retail price. Discuss TWO practical limitations for the supermarket to conduct coupon discount.

Question 1. In this question we begin by constructing a competitive market for a good, and then compare the outcome when supply is controlled by a single-price monopolist. Suppose that the demand for units of some beverage comes from households with the preferences over units of the beverage (x1) and expenditure on all other goods (x2) represented by the following utility function, U(x1,x2) = 800 In(x1) + x2 Each household has an exogenous income of I per period. The second 'good' is referred to as a 'composite' good and is an amount of money. We assume throughout that p2 = 1. (4 marks) Derive a household's ordinary demand functions, x1(P1, 1,1) and x2(P1,1,1) when they are price-takers in the market for the beverage. How large does the exogenous income need to be in order for the household to enjoy a positive amount of both 'goods'? i) (2 marks) Suppose there are 80 households who participate in the market for the beverage. Half of the households have an income of $1200 per period,…

consider a market with inverse demand P(Q) = 10 − Q and two firms with cost curves C1(q1) = 2q1 and C2(q2) = 2q2 (that is, they have the same marginal costs and no fixed costs). They compete by choosing quantities.  Suppose that Firm 1 chooses quantity first and is able to credibly commit to this choice. Then firm 2 choose its quantity after observing firm 1’s quantity. In the SPNE of this game, what is the price faced by consumers?-  p = 3-  p = 4-  p = 5-  p = 6-  p = 7

A monopoly sells its good in the U.S. and Japanese markets. The American inverse demand function is Pa = 90 - Qa' and the Japanese inverse demand function is P₁ = 80 - 2Qj, where both prices, På and p₁, are measured in dollars. The firm's marginal cost of production is m = $25 in both countries. If the firm can prevent resales, what price will it charge in both markets? (Hint: The monopoly determines its optimal (monopoly) price in each country separately because customers cannot resell the good.) The equilibrium price in Japan is $ (round your answer to the nearest penny) The equilibrium price in the U.S. is $. (round your answer to the nearest penny)