3. MONOPOLY AND PRICING STRATEGIES The Empire Theatre is contemplating charging a different price for a ticket to an afternoon show than for the same film that evening. In adopting a pricing strategy, the company must consider that fixed costs are $20 per week, and variable costs are $0.50 per customer. Further more, a study of weekly demand for afternoon and evening shows has revealed: PA = 8.5 - 0.4QA, PB = 6.5 - 0.3Q B (a) (10 marks) Calculate the equilibrium prices and quantities in each market. (b) (5 marks) Draw a graph to show how the prices and quantities are determined in each market. (c) (5 marks) Which demand curve do you think describes the afternoon market, A or B? Explain the economic intuition. (d) (5 marks) Calculate the price elasticity of demand in market A and B