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Bear's Smokehouse BBQ in downtown Hartford serves three kinds of customers, kids, UConn students, and townie adults. There are 15,000 kids, 10,000 UConn students and
Bear's Smokehouse BBQ in downtown Hartford serves three kinds of customers, kids, UConn students, and townie adults. There are 15,000 kids, 10,000 UConn students and 25,000 townie adults in downtown Hartford. Each kid's willingness to pay for a meal is $5. Each UConn student's willingness to pay for a meal is $10. Each adult's willingness to pay for a meal is $20. Each will buy at most one meal. Bear's BBQ's marginal cost per meal is constant at $4 and there is no fixed cost. All meals are identical. (20 points) a. Suppose that Bear's BBQ cannot price-discriminate and needs to charge kids, UConn students and townie adults the same price per meal. If Bear's BBQ charges $8, who will buy meals and what will Bear's BBQ's profit be? How large is consumer surplus
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