Suppose you are the owner of a movie theater. There are two types of customers: senior (‘s’) and non-senior (‘ns’). You know if a customer is a senior or non-senior and so you could use price discrimination with selection by indicators. The demand for movies is: Senior: qs = 30 − 3ps Non-Senior: qns = 15 − pns 1. Plot the total demand curve and the marginal revenue curve if the two types of consumers are as one. 2. Suppose that MC = 1 and that you can only set a single price. 2a. What is the optimal uniform price? 2b. What is the profit under uniform pricing? 2c. What is consumer surplus under uniform pricing?
Suppose you are the owner of a movie theater. There are two types of customers: senior (‘s’) and non-senior (‘ns’). You know if a customer is a senior or non-senior and so you could use price discrimination with selection by indicators. The demand for movies is: Senior: qs = 30 − 3ps Non-Senior: qns = 15 − pns 1. Plot the total demand curve and the marginal revenue curve if the two types of consumers are as one. 2. Suppose that MC = 1 and that you can only set a single price. 2a. What is the optimal uniform price? 2b. What is the profit under uniform pricing? 2c. What is consumer surplus under uniform pricing?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose you are the owner of a movie theater. There are two types of customers: senior (‘s’) and non-senior (‘ns’). You know if a customer is a senior or non-senior and so you could use
Senior: qs = 30 − 3ps
Non-Senior: qns = 15 − pns
1. Plot the total demand curve and the marginal revenue curve if the two types of consumers are as one.
2. Suppose that MC = 1 and that you can only set a single price.
2a. What is the optimal uniform price?
2b. What is the profit under uniform pricing?
2c. What is
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