What are profits associated with the option

Reference no: EM13218629

Customers to Live Theaters, Inc. can be divided into two groups: seniors and everyone else. The inverse demand curves for each of the two groups are given below. The marginal cost (which equals the average variable cost) of serving an additional patron, either senior or everyone else, is equal to $4. Fixed costs are equal to $1000. Ps = 80 - Qs Pe = 100 - 2Qe Where Ps and Pe denote, respectively, the prices charged to seniors and everyone else and Qs and Qe denote the number of seniors and the number of all other customers served.

a. What is Live Theaters' total revenue function? What is its total cost function? Its total profits function?

b. What are the profit maximizing levels of price and output if Live Theaters, Inc. engages in third degree price discrimination? Show that MRe = MRs = MC

c. What are profits associated with this option?

d. If Live Theaters charges one price to all patrons, what would it be? How many customers would it serve? What would be its profits?

Reference no: EM13218629

Questions Cloud

How to find the projects probability distribution : the construction time for a bridge depends on the weather. the project is expected to take 250days if the weather is dry and hot. if the wather is damp and cool it will take 350days. otherwise, it is expected to take 300 days.

Should computer products accept the offer to supply units : All of its current sales are to private sector customers and each pays $12.00 per unit for the equipment. The sales price is equal to 150% of average variable costs. A government agency has offered to purchase 300,000 units at $10.00 each. If Comp..

Compute the molarity, percent composition by weight : Calculate the molarity, percent composition by weight, and mole fraction of HCL in an aqueous solution 12 M HCl that has a density of 1.20 g/mL.

Define percent of the fuel consists of the lighter isotope : what percent of the fuel consists of the lighter isotope? Assume that the masses of the two isotopes are exactly 235 and 238 amu.

What are profits associated with the option : Customers to Live Theaters, Inc. can be divided into two groups: seniors and everyone else. The inverse demand curves for each of the two groups are given below. The marginal cost (which equals the average variable cost) of serving an additional p..

Calculate the ev for the next years discount rate : over the last 10 years, the hurdle or discount rate for projects from the firms research and development division has been 10% twice, 15% three times, and 20% the rest of the time. There is no recognizable pattern.

State the compound contains calcium ions : An ionic compound forms when calcium (Z = 20) reacts with iodine (Z = 53). If a sample of the compound contains 1.20 1019 calcium ions, how many iodide ions does it contain?

What is the expected value for the annual saving : annual savings due to an energy efficiency projects have a most likely value of $30,000. the high estimate of $40,000 has a probability of .2, and the low estimate of $20,000 has a probability of .3. what is the expected value for the annual savin..

Calculate the total revenue and price elasticity of demand : A demand curve is given by the following equation: P = -2Q + 40. i) Calculate the Total Revenue when Q = 5 and when Q = 8. ii) Calculate the price elasticity of demand between Q = 5 and Q = 8. Round decimal answers to two places.

User Account

All Pages