In Karachi Nuplex Cinema has a monopoly on the rights to show movies throughout the city. The monopolist knows the price elasticities of demand for movies by children and adults which are 4 and 0.22 respectively. Suppose the monopolist can charge different prices for the children and adults.

a.Explain why the monopolist can charge different prices.2.5 Marks

b.Explain for whom shall the monopolist charge higher prices and why. Draw graph to support your answer.2.5 Marks