What are the tr functions for the two types of seats

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Reference no: EM13199249

A baseball club has several monopolies. Two of them are: "good" seats and "nosebleed" seats. Market demand for each good is as follows:
Good Seats: P = 100 - 2Q

Nosebleeds: P = 30 - 2Q

With the stadium built, payers paid, and the other costs of playing baseball game incurred, the marginal cost of admitting an additional customer is essentially zero (MC=0). Everything else is "sunk" or fixed costs, TC = 1000.
a. What are the total revenue (TR) functions for the two types of seats?
b. Write the overall profit function.
c. Maximize each TR function to find the optimal quantity of tickets in each market.
d. What price will they charge in each market to sell the optimal numbers of tickets.
e. What is the profit when they sell tickets at the above prices?
f. What is Consumer Surplus (area under demand curve and above the price) in each market? Would overall welfare (profit plus Consumer Surplus) be higher if the they charged prices equal to MC?
g. If the they priced tickets at marginal cost (free!) they would incur a loss. Suggest a pricing regulation that government might enact to increase Consumer Surplus without driving the team out of business.
h. Is the team a natural monopoly? I.e., if another firm entered the market with the same fixed costs and both teams split both markets, neither would make a profit.

Reference no: EM13199249

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