At what price would the number of tickets be sold

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Reference no: EM13221742

The Grand Theater is a movie house in a medium-sized college town. This theater shows unusual films and treats early-arriving movie goers to live organ music and Bugs bunny cartoons. If the theater is open, the owners have to pay a fixed nightly amount of $500 to show a film. In addition, the movie house incurs an additional cost of two dollars for each person that attends a movie. For simplicity, assume that if the theater is closed, its costs are zero. The nightly demand for Grand Theater movies by students is Qs = 220 - 40Ps, where Qs is the number of movie tickets demanded by students at price Ps. The nightly demand for nonstudent moviegoers is QN= 140-20PN. If the Grand Theater charges a single price, PT, to everybody, then at prices between 0 and $5.50:

(a) the aggregate demand function for movie tickets is QT =

(b) What is the profit-maximizing number of tickets for the Grand Theater to sell if it charges one price to everybody?

(d) How much consumer surplus do the students obtain when there is a uniform price?

(e) How much profits would the Grand make?

Reference no: EM13221742

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