Question Two Consider the case of pricing for the UNZA Basketball games at the University of Zambia Sport Hall. The free

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Question Two Consider The Case Of Pricing For The Unza Basketball Games At The University Of Zambia Sport Hall The Free 1 (250.26 KiB) Viewed 12 times

Question Two Consider the case of pricing for the UNZA Basketball games at the University of Zambia Sport Hall. The freedom fighters have a demand function given as pa(qa) = 100-qa, while students have demand function ps(qs) = 20 - qs / 10. The analysis in the notes concludes that if MC = 0, the profit maximizing quantity (i.e. stadium capacity) is 150, with q'a = 50 and q*s = 100. Suppose that the capacity of the Sport Hall is equal to Q < 150. (a) For what values of Q is it profit maximizing to sell only to students? (HINT: It may be helpful to solve this question: For what values of qa is MR(alumni) > 20?) (b) Assume that it is profit maximizing to sell to both groups. Solve for profit- maximizing prices and quantities as a function of Q.