The demand by senior citizens for showings at a local movie house has a constant price elasticity equal to -6. The demand curve for all other patrons has a constant price elasticity equal to -5. If the marginal cost per patron is $2 per showing, how much should the movie house charge members of each group? Instructions: Round your answers to 2 decimal places. Senior citizens: $ Adults: $

The demand by senior citizens for showings at a local movie house has a constant price elasticity equal to -6. The demand curve for all other patrons has a constant price elasticity equal to -5. If the marginal cost per patron is $2 per showing, how much should the movie house charge members of each group? Instructions: Round your answers to 2 decimal places. Senior citizens: $ Adults: $

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter14: Pricing Techniques And Analysis

Section: Chapter Questions

Problem 2E: The price elasticity of demand for air travel differs radically from first-class (1.3) to...

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The price elasticity of demand for air travel differs radically from first-class (1.3) to unrestricted coach (1.4) to restricted discount coach (1.9). What do these elasticities mean for optimal prices (fares) on a cross-country trip with incremental variable costs (marginal costs) equal to $120?
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