How much profit will the movie theater make

Assignment Help Microeconomics
Reference no: EM13319774

The movie theater in College town serves two kinds of customers: students and pro-fessors. There are 900 students and 100 professors in College town. Each student’s willingness to pay for a movie ticket is $5. Each professor’s willingness to pay for a movie ticket is $10. Each will buy at most one ticket. The movie theater’s marginal cost per ticket is constant at $3, and there is no fixed cost.

a. Suppose the movie theater cannot price-discriminate and needs to charge both students and professors the same price per ticket. If the movie theater charges $5, who will buy tickets and what will the movie theater’s profit be? How large is consumer surplus?

b. If the movie theater charges $10, who will buy movie tickets and what will the movie theater’s profit be? How large is consumer surplus?

Now suppose that, if it chooses to, the movie theater can price-discriminate between students and professors by requiring students to show their student ID. If the movie theater charges students $5 and professors $10, how much profit will the movie theater make? How large is consumer surplus?

Reference no: EM13319774

Questions Cloud

Is it a good idea for the monopolist to produce the 9th unit : A monopolist knows that in order to expand the quantity of output it produces from 8 to 9 units that it must lower the price of its output from $2 to $1. Calculate the quantity effect and the price effect
Explain the ph at the points in the titration : Calculate the pH at the points in the titration of 40.00 mL of 0.425 M NH3 for the reaction below. NH3(aq) + HNO3 ? NH4+(aq) + NO3?(aq) For NH3, Kb = 1.8x10-5. Enter your answer with 2 decimal places. Enter scientific notation as 1.23E4
Explain the ph at the half-neutralization point : The pH at the half-neutralization point. Enter only numbers in your answer. (Do not include units.) (d) The pH at the equivalence point.
Briefly describe the dilemma : Briefly describe the dilemma.
How much profit will the movie theater make : Suppose the movie theater cannot price-discriminate and needs to charge both students and professors the same price per ticket. If the movie theater charges $5, who will buy tickets and what will the movie theater’s profit be? How large is consumer s..
Explain titration will require more moles of base than acid : Titration will require more moles of base than acid to reach the equivalence point. E. titration will require more moles of acid than base to reach the equivalence point.
The effectiveness of the competitive strategy : Working in pairs as established by the instructor, based on the case studyinformation, discuss the organization’s situation and its competitive strategy. Then, using current information retrieved from the Six Flags website and scholarly articles acce..
How large is each individual consumer surplus : How large is each individual consumer surplus? How large is total consumer surplus? Calculate producer surplus by summing the producer surplus generated by each sale.
How large is the deadweight loss associated with monopoly : If De Beers charges the monopoly price, how large is the individual consumer surplus that each buyer experiences? Calculate total consumer surplus by summing the individual consumer surpluses. How large is producer surplus?

Reviews

Write a Review

Microeconomics Questions & Answers

  What is velocity if the money stock equals

Real GDP equals 5000, nominal GDP equals 10,000 and the price level equals 2, then what is velocity if the money stock equals 2000?

  Discuss concepts of price transparency and information

Discuss the concepts of price transparency and information asymmetry and they apply to the diamond industry as a result of the entry of BlueNile. Name another industry where the Internet has had a similar impact.

  Discuss the direction of change in price and quantity

Discuss the direction of change in price, quantity, and average total cost that you expect. Then check your answer by calculating price, quantity, and profit. You can refer back to graphical problems you solved in this news analysis to observe the..

  What happens to the natural rate of unemployment

If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment? Where is the ec..

  Which piece of information is more important in the utility

Which piece of information is more important in the utility maximization process: marginal utility per unit of the good or marginal utility per dollar? WHY?

  )what type of goods are pepsi and coke for mary

how many units of each product should she buy in order to maximize her utility. Show this utility maximiz- ing combination combination of Pepsi and Coke on the graph. how would her consumption and utility maximizing bundle of Coke and Pepsi change..

  Which receives a fee when it directs newly procured organ

If the formerly "free" organ now has a price placed upon it, then that will drive up the total costs for having organ transplants, thus making such operations more expensive and, therefore, out of reach for lower-income people.

  Explain the crowding-out effect

The "crowding-out effect" suggests that A. excessive population in the cities is pushing people into the suburbs.B. if consumption spending increases investment spending must decrease. C. tax increases are paid primarily out of saving and, therefore,..

  Determine profit maximizing output level

Suppose you are the CEO of ClipIt, a paper clip producer. Your firm enjoys a patented technology that allows it to make paper clips faster and at a lower cost than your only rival, FastenIt.

  Discuss its implications and assess its importance for

Discuss its implications and assess its importance for macroeconomic policy.

  Difference between average revenue and marginal revenue

Describe the difference between average revenue and marginal revenue .why are both of these revenue measures important to a profit-maximizing firm?

  Discuss the optimal method for procuring a modest number

Discuss the optimal method for procuring a modest number of standardized inputs that are sold by many firms in the marketplace. What are the primary advantages and disadvantages of using this method to acquire inputs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd