Question 3 (20 marks) A concert of a pop singer will be held at the coliseum with a full capacity of 7000 seats. The organizer is a monopoly to this singer's concert and only one concert will he held. The total cost of this concert is $1.5 million while the marginal cost of opening an additional seat is zero up to its full capacity, and it is essentially impossible to have more seats (infinite marginal cost). The reservation price (maximum price one is willing to pay) of a concert ticket for different groups of viewers are shown in the table below. Each viewer at most will buy one ticket. The organizer considers selling in groups, where the organizer will sell to either no one or everyone in the group (discrete case). Number of viewers in this group Viewer Group Reservation Price ($) A 1000 1000 B 900 1000 C 800 1000 700 1000 E 600 1000 F 500 1000 GH 400 1000 300 1000 5 (a) Consider that the organizer can only charge the same price to all viewers. Fill in the following table with the price it can charge for each target number of tickets sold, and the corresponding total revenue and marginal revenue. (Note: 1. Marginal revenue should be expressed in terms of per-ticket increased. 2. You can express numbers in thousand (k) or million (m).) (6 marks) Quantity (tickets) Total Revenue ($) Price ($) Marginal Revenue ($/ticket) 1000 2000 3000 4000 5000 6000 7000 8000 (b) What are the profit-maximizing quantity and price of the ticket sold by the organizer? (2 marks) (c) What is the allocative efficient quantity of tickets? Does the organizer sell at this level? (2 marks) (d) Now, the organizer considers practicing price discrimination, and it knows that Group C, D, F, G are from the elderly, and they can be charged a price different from the price to other adult groups. Fill in the following tables. (6 marks) Elderly Market: Quantity (tickets) 1000 2000 3000 4000 Market for other adults: Quantity (tickets) 1000 2000 3000 4000 Price ($) TR ($) MR ($/ticket) Price ($) TR ($) MR ($/ticket) (e) What are the profit-maximizing prices and quantities for market of elderly and market of other adults respectively? (2 marks) (f) In what ways has the organizer's profit increased? Explain briefly without detailed calculations. (2 marks)