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Imagine you own a movie theatre. You decide to sell tickets to Star Wars. You notice that teenagers have a price elasticity of demand equal

Imagine you own a movie theatre. You decide to sell tickets to Star Wars. You notice that teenagers have a price elasticity of demand equal to -2.5 while adults have a price elasticity of demand equal to -1.2. You should do the following:

A.

maximize revenue by setting MR=0 and identifying the price that goes along with the revenue maximizing quantity

B.

charge a higher price to adults

C.

experiment with various combinations to obtain efficiency

D.

charge a lower price to adults

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