1. Suppose that the University of Michigan Cinema is a local monopoly whose demand curve for adult tickets on Saturday night is P 12 2Q, where P is the price of a ticket in dollars and Q is the number of tickets sold in hundreds. The demand for children’s tickets on Sunday afternoon is P 8 3Q, and for adult tickets on Sunday afternoon, P 10 4Q. On both Saturday night and Sunday afternoon, the marginal cost of an additional patron, child or adult, is $2. LO4

a. What is the marginal revenue curve in each of the three submarkets?

b. What price should the cinema charge in each of the three markets if its goal is to maximize profit?