A movie monopolist sells to college students and other adults. The demand function for students is Q = 1,000 – 25P, and the demand function for other adults is Q% = 1,600 – 25P. The marginal cost is $4 per ticket (instead of $2 per ticket, as in the Worked-Out Problem). Instructions: Round your answers to 2 decimal places. a. What is the effect of price discrimination on consumer and aggregate surplus? CS = $ 15300 AS = $ 45900 b. What is the effect without price discrimination on consumer and aggregate surplus? CS = $ 23400 AS = $ 52200
A movie monopolist sells to college students and other adults. The demand function for students is Q = 1,000 – 25P, and the demand function for other adults is Q% = 1,600 – 25P. The marginal cost is $4 per ticket (instead of $2 per ticket, as in the Worked-Out Problem). Instructions: Round your answers to 2 decimal places. a. What is the effect of price discrimination on consumer and aggregate surplus? CS = $ 15300 AS = $ 45900 b. What is the effect without price discrimination on consumer and aggregate surplus? CS = $ 23400 AS = $ 52200
Chapter8: Monopoly
Section: Chapter Questions
Problem 15SQ
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