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Consider a movie theater as a monopolist. There are two groups of moviegoers, students and non-students. The students' demand function for movie tickets is Qs = 200-20ps,160;and the non-students' demand function is Qn = 100- 5pn. The movie theater incurs zero marginal cost for serving additional customer, but there is a fixed cost of showing 160;a movie at $100.

(a) Suppose the movie theater charges a uniform ticket price to both students and non-students. i. How many tickets will be sold to students and non-students? And at what price? ii. What will be the movie theater's profit?

(b) Suppose now the movie theater charges dierent prices to students and non-students, using student IDs as a means to separate the two groups. i. How many tickets will be sold to students and non-students? And at what prices? ii. What will be the movie theater's prfit?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9818855

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