There are two types of fans of Kansas City Chiefs games: Enthusiastic (E) and Unenthusiastic (U). Each Enthusiastic fan has a representative demand curve given by PE= 1205QE, and each Unenthusiastic fan has a representative demand curvegivenby PU=1208QU.Themarginalcostofticketproductionisconstantat MC= 40 for all consumers.

1.Suppose the Chiefs can perfectly distinguish between two types of fans and charges a two-part tariff for each type.

a)WhatfixedfeeandperunitpricewilltheychooseforEnthusiasticfans?For Unethusiastic fans?

b)What is the consumer surplus for each type of consumer?

c)What are the profits for the Chiefs from each type of consumer?

2.Suppose instead that the Chiefs can't distinguish between two types of fans.Instead of setting a single constant price per game, the Chiefs engages in menu pricing.

a)What are the optimal ticket packages (menu pricing) set by the Chiefs?

b)What is the consumer surplus of each type of consumer?

c)What are the profits for the Chiefs from each type of consumer?