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Question 2 (50 Points): Cruising on Down the Sea, Again Tianyu took over Mission Impossible Escape Room Adventures (MIERA, as in the second midterm), which
Question 2 (50 Points): Cruising on Down the Sea, Again Tianyu took over Mission Impossible Escape Room Adventures (MIERA, as in the second midterm), which monopolizes and specializes in high-end multi-week escape-room-type adventures primarily conducted on very small luxury cruise ships. The consumers can be segmented into two markets: cruise- lovers (L) whose inverse demand (for cruise rides) is Pr = 50 - 1.5q, and non-cruise-lovers (N) whose inverse demand is Py = 100 - 10qN. The cost structure of cruise rides can be described as MC = ATC = 20 (explicit operational costs and implicit opportunity costs). To maximize profit, Tianyu decides to exercise price discrimination appropriately. A. (15 points) If Tianyu can distinguish between cruise lovers and non-lovers, which degree of price discrimination should Tianyu exercise? Determine the optimal prices for cruise-lovers (L) and non-cruise-lovers (N), respectively. Show your calculations and explain your answer briefly. Tianyu should exercise price discrimination. A. First degree B. Second degree C. Third degree D. Indeterminate Optimal price for cruise-lovers PL Optimal price for non-cruise-lovers PM Your calculation and explanation here
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