Please Help Answer All 1 (59.43 KiB) Viewed 11 times
Beth owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists and tourists, and Beth decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show demand (D) curves and marginal revenue (MR) curves for the two markets. Beth's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 10 0 0 Market A MR 9 1 2 3 4 5 6 7 8 QUANTITY (Admission tickets per day) D A 10 ? PRICE (Dollars per ticket) 10 0 Market B MR, B D, 0 1 2 3 4 5 6 7 8 9 QUANTITY (Admission tickets per day) 10 (?)
Suppose that at first, Beth charges the same price of $4 per admission in both markets so that the total number of admissions demanded is Suppose now that Beth decides to charge a different price in each market. To maximize revenue, Beth should charge $ in Market A and $ per admission in Market B. At these prices, she will sell a total quantity of Complete the following table by calculating Beth's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Price Policy Nondiscriminatory Discriminatory Total Revenue $ $ per admission admission tickets per day. Beth charges a lower price in the market with a relatively price elasticity of demand.
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!