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Ivan runs a small independent movie theatre in Scarborough, which presently attracts 1 2 0 0 customers per week at a ticket price of
Ivan runs a small independent movie theatre in Scarborough, which presently attracts customers per week at a ticket price of $ His customer base comprises adult customers and seniors. He would like to increase his total revenue by practising price discrimination. He knows that the demand by adults is fairly inelastic and that a change in the admission price of $ would change the quantity by customers. He also recognizes that the demand by seniors is fairly elastic and a $ change in the price would result in a change of customers. a From this information, complete the table above. b What is Ivan's present total revenue? Total revenue: $ c Should he increase or decrease the price for adults? Should he increase or decrease the price for seniors? Adults: Seniors: d What price will maximize the total revenue from adult customers?
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