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You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: Price (Dollars) 10 9 B 7 6 5 4 3 2 1 Adults (Tickets) 0 100 200 300 300 300 300 300 300 300 300 Children (Tickets) 0 0 0 0 100 200 200 200 200 200 To maximize profit, you would charge) $7 for an adult's ticket and $4 for a child's ticket. Total profit in this case would be 100

You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: Price (Dollars) 10 9 B 7 6 5 4 3 2 1 Adults (Tickets) 0 100 200 300 300 300 300 300 300 300 300 Children (Tickets) 0 0 0 0 100 200 200 200 200 200 To maximize profit, you would charge) $7 for an adult's ticket and $4 for a child's ticket. Total profit in this case would be 100

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 11PA: You are the curator of a museum. The museum is running short of funds, so you decide to increase...
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The city council passes a law prohibiting you from charging different prices to different customers. Now you set a price of $ You, the Producer for all tickets, resulting in S Indicate whether each of the following groups of people is better off, worse off, or the same because of the law prohibiting price discrimination. Group of People Better Off Worse Off Unchanged Adults O Children O O O O O in profit. ppose the fixed cost of the play were $2,500 rather than $2,000. Complete the following sentences indicating how this would change your answers to the previous parts. In the presence of price discrimination, the adult price of a ticket would Total profit would and the child price would If price discrimination were banned and the monopolist continued to produce the play no matter what the profit, the price of a ticket would and total profit would to S
Transcribed Image Text:The city council passes a law prohibiting you from charging different prices to different customers. Now you set a price of $ You, the Producer for all tickets, resulting in S Indicate whether each of the following groups of people is better off, worse off, or the same because of the law prohibiting price discrimination. Group of People Better Off Worse Off Unchanged Adults O Children O O O O O in profit. ppose the fixed cost of the play were $2,500 rather than $2,000. Complete the following sentences indicating how this would change your answers to the previous parts. In the presence of price discrimination, the adult price of a ticket would Total profit would and the child price would If price discrimination were banned and the monopolist continued to produce the play no matter what the profit, the price of a ticket would and total profit would to S
6. Problems and Applications Qb You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: Price (Dollars) 10 9 8 7 6 5 4 3 2 1 0 Adults (Tickets) 0 100 200 300 300 300 300 300 300 300 300 Children (Tickets) 0 0 0 0 0 100 200 200 200 200 200 To maximize profit, you would charge) $7 for an adult's ticket and $4 for a child's ticket. Total profit in this case would be 100
Transcribed Image Text:6. Problems and Applications Qb You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: Price (Dollars) 10 9 8 7 6 5 4 3 2 1 0 Adults (Tickets) 0 100 200 300 300 300 300 300 300 300 300 Children (Tickets) 0 0 0 0 0 100 200 200 200 200 200 To maximize profit, you would charge) $7 for an adult's ticket and $4 for a child's ticket. Total profit in this case would be 100
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ISBN:
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