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Consider a concert hall that seats 400 people. The concert organizers are aware that there two different market segments. One is for regular adults defined by P1=600Q1. The other is for students and senior citizens defined by P2=400Q2. For the sake of convenience, we will assume that all costs are fixed such that marginal cost of each additional audience member is zero. This implies that maximising profit is the same as maximising revenue. The concert organizers wish to maximize profit (revenue) but can do so with the constraint that only 400 tickets can be sold. This means that the concert organizers are not able to independently maximize profit (revenue) in each market segment because that might mean having to sell more than 400 tickets. How many tickets should be sold in each market segment and at what price in each segment to maximize profit (revenue)? Part B: (8 marks) Consider a monopolist who sells in two different markets. The (inverse) demand curve in Market 1 is given by P1=360Q1. The (inverse) demand curve in Market 2 is given by P2=240Q2. For the sake of convenience, we will assume that the monopolist has zero marginal costs implying that maximizing profit and maximining revenue are synonymous for this monopolist. (i) What is the revenue-maximizing quantity and price in Market 1 ? What is the resulting revenue? (2 marks) (ii) What is the revenue-maximizing quantity and price in Market 2 ? What is the resulting revenue? (2 marks) (iii) Now suppose the monopolist did not discriminate in prices and charged the same price in both markets. What is the revenue maximizing price and quantity in this case? Show that the resulting revenue is less than what the monopolist makes when she charges two different prices across the two different markets. (4 marks) Consider a concert hall that seats 400 people. The concert organizers are aware that there two different market segments. One is for regular adults defined by P1=600Q1. The other is for students and senior citizens defined by P2=400Q2. For the sake of convenience, we will assume that all costs are fixed such that marginal cost of each additional audience member is zero. This implies that maximising profit is the same as maximising revenue. The concert organizers wish to maximize profit (revenue) but can do so with the constraint that only 400 tickets can be sold. This means that the concert organizers are not able to independently maximize profit (revenue) in each market segment because that might mean having to sell more than 400 tickets. How many tickets should be sold in each market segment and at what price in each segment to maximize profit (revenue)? Part B: (8 marks) Consider a monopolist who sells in two different markets. The (inverse) demand curve in Market 1 is given by P1=360Q1. The (inverse) demand curve in Market 2 is given by P2=240Q2. For the sake of convenience, we will assume that the monopolist has zero marginal costs implying that maximizing profit and maximining revenue are synonymous for this monopolist. (i) What is the revenue-maximizing quantity and price in Market 1 ? What is the resulting revenue? (2 marks) (ii) What is the revenue-maximizing quantity and price in Market 2 ? What is the resulting revenue? (2 marks) (iii) Now suppose the monopolist did not discriminate in prices and charged the same price in both markets. What is the revenue maximizing price and quantity in this case? Show that the resulting revenue is less than what the monopolist makes when she charges two different prices across the two different markets. (4 marks)