The director of a theater company in a small college town is considering changing the way he prices tickets. He has hired an economic consulting firm to estimate the demand for tickets. The firm has classified people who go to the theater into two groups and has come up with two demand functions. The demand curves for the general public (Qgp) and students (Qs) are given below: Q_gp = 300 - 4 P Q_s = 100 3 P

a. Graph the two demand curves, with P on the vertical axis and Q on the horizontal axis

b. If current price is $20, find the price elasticity of demand for each group at the current price

c. Is the director maximizing the revenue at current price? If not who should he charge more or less (Why?)