A theater that shows the same movie to large families and, Ask an Expert

Economics

For each of the following examples, explain how and why a monopoly would try to price discriminate.

1) Air transport for businesspeople and tourists.

2) Serving food on weekdays to businesspeople and retired people. (Hint: Which group has more flexibility during a weekday to adjust to a price change and, hence, a higher price elasticity of demand?

3) A theater that shows the same movie to large families and to individuals and couples. (Hint: For which set of people will the overall expense of a movie be a larger part of their budget, so that demand is more elastic?)

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M9696321

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