Suppose the demand for tickets to the movie theater for adults is Pa = 150-qa and...
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Suppose the demand for tickets to the movie theater for adults is Pa = 150-qa and the demand for college students is pe = 100 - Assume MC = AC = 0. a) What is the profit maximizing pricing policy for the theater using third-degree price discrimination? b) What is the producer and consumer surplus under third-degree price discrimination? c) If the theater is unable to price discriminate and has to charge the same price for adults and college students, what would be the price and quantity sold for a ticket? d) What is the producer and consumer surplus with no price discrimination? e) Which policy results in a greater social welfare? Explain. Suppose the demand for tickets to the movie theater for adults is Pa = 150-qa and the demand for college students is pe = 100 - Assume MC = AC = 0. a) What is the profit maximizing pricing policy for the theater using third-degree price discrimination? b) What is the producer and consumer surplus under third-degree price discrimination? c) If the theater is unable to price discriminate and has to charge the same price for adults and college students, what would be the price and quantity sold for a ticket? d) What is the producer and consumer surplus with no price discrimination? e) Which policy results in a greater social welfare? Explain.
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a The profit maximizing pricing policy for the theater using thirddegree price discrimination is to charge separate prices for adults and college students The profit maximizing price for adults would ... View the full answer
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
Posted Date:
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