Give the Queen what she wants? Beyonce has just announced a new concert at Madison Square Garden. She sells her tickets to her fans through her fan club website. Estimates from her previous New York concerts suggest that the inverse demand for this show will be given by () = 5000 /5.

Madison Square Garden charges artists $5,000,000 to rent the venue. In addition, MSG charges performers a per-attendee fee of $10 to cover security, clean up, and other overhead, and has a maximum capacity of 18,000 fans. When Beyonce is not putting on her own concerts, she has a standing offer to put in appearances at random Hamptons parties for $400,000.

(a) Beyonce is clearly a monopoly provider of Beyonce concerts. What price should a profit- maximizing Beyonce set?

(b) At this price, what is her total (economic) profit, net of all costs?

(c) You are Beyonce's manager. She tells you that she really dislikes seeing empty seats when she

performs. What price should you charge to ensure Beyonce performs to a full house? Explain.

(d) Beyonce says she would rather give up $5 million than perform to a crowd with a single empty

seat. What price should you set for tickets to her MSG show?

Sal's Streaming Company Sal's Streaming Company streams TV shows to subscribers in the US and Canada. Demand is

= 50 (13) and = 80 (2/3) where 's are in thousands of subscriptions per year and 's are the subscription prices per year. The cost of providing units of service is given by = 1000 + 30, where = + .

(a) What are the profit-maximizing prices and quantities for the US and Canadian markets? (b) As a consequence of a new VPN service that Facebook has developed, subscribers in Canada

are now able to get the US streams and vice versa, so Sal can charge only a single price. What

is the profit-maximizing single price that he should charge? (c) In which situation is Sal better off? In terms of consumers' surplus which situation do people

in Canada prefer and which do people in the US prefer? Why?