In the town of "One Horse" there is one movie theater. Two groups of consumers, adults (A) and children (C), attend this theater. Suppose the demand for movies by adults is given by: Q = 50 - 0,50P, where P, is price of an adult movie ticket (in cents) and Q, is the number of movie tickets sold to adults at the theater. Suppose the demand for movies by children is given by: Qc = 20 - 0.50Pc. where Pe is price of a children's movie ticket (in cents) and Qc is the number of movie tickets sold to children at the theater. Also, imagine total cost is fixed at $450, thus making marginal cost of providing one more movie ticket to either an adult or a child constant at zero. (29] If the movie theater is able to price discriminate among its two groups of consumers, then it should charge a higher price to group A. А. True В. False [30] If the movie theater is able to price discriminate among its two groups of consumers, then its maximum profit is closest in value to: A. $800 B. $850 C. $900 D. $1200 [31) If the movie theater is able to price discriminate among its two groups of consumers, then which group has the highest price elasticity of demand (in absolute value)? А. A В. [32] In a famous song by Dionne Warwick, Dionne sings "What's it all about Alfie? Is it just for the moment we live?". Suppose Alfie responds, “No, I care as much about tomorrow as I do today". Accordingly, from Alfie's perspective, his discount factor (6) equals: A. В. C. D. [33] A firm must have some ability to control price to engage in price discrimination.
In the town of "One Horse" there is one movie theater. Two groups of consumers, adults (A) and children (C), attend this theater. Suppose the demand for movies by adults is given by: Q = 50 - 0,50P, where P, is price of an adult movie ticket (in cents) and Q, is the number of movie tickets sold to adults at the theater. Suppose the demand for movies by children is given by: Qc = 20 - 0.50Pc. where Pe is price of a children's movie ticket (in cents) and Qc is the number of movie tickets sold to children at the theater. Also, imagine total cost is fixed at $450, thus making marginal cost of providing one more movie ticket to either an adult or a child constant at zero. (29] If the movie theater is able to price discriminate among its two groups of consumers, then it should charge a higher price to group A. А. True В. False [30] If the movie theater is able to price discriminate among its two groups of consumers, then its maximum profit is closest in value to: A. $800 B. $850 C. $900 D. $1200 [31) If the movie theater is able to price discriminate among its two groups of consumers, then which group has the highest price elasticity of demand (in absolute value)? А. A В. [32] In a famous song by Dionne Warwick, Dionne sings "What's it all about Alfie? Is it just for the moment we live?". Suppose Alfie responds, “No, I care as much about tomorrow as I do today". Accordingly, from Alfie's perspective, his discount factor (6) equals: A. В. C. D. [33] A firm must have some ability to control price to engage in price discrimination.
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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![Use the following to answer questions (29) - (31):
In the town of “One Horse" there is one movie theater. Two groups of consumers, adults (A) and
children (C), attend this theater. Suppose the demand for movies by adults is given by:
QA = 50 - 0.50PA»
where PA is price of an adult movie ticket (in cents) and Q, is the number of movie tickets sold to adults at
the theater. Suppose the demand for movies by children is given by:
Qc= 20 - 0.50PC
where Pc is price of a children's movie ticket (in cents) and Qc is the number of movie tickets sold to
children at the theater. Also, imagine total cost is fixed at $450, thus making marginal cost of providing one
more movie ticket to either an adult or a child constant at zero.
[29]
charge a higher price to group A.
If the movie theater is able to price discriminate among its two groups of consumers, then it should
A.
True
В.
False
[30]
maximum profit is closest in value to:
If the movie theater is able to price discriminate among its two groups of consumers, then its
А.
$800
В.
$850
С.
$900
D.
$1200
[31]
group has the highest price elasticity of demand (in absolute value)?
If the movie theater is able to price discriminate among its two groups of consumers, then which
A.
A
В.
C
In a famous song by Dionne Warwick, Dionne sings "What's it all about Alfie? Is it just for the
[32]
moment we live?". Suppose Alfie responds, "No, I care as much about tomorrow as I do today".
Accordingly, from Alfie's perspective, his discount factor (8) equals:
A.
1
В.
С.
D.
-1
[33]
A firm must have some ability to control price to engage
in price discrimination.
A.
True
В.
False](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb17dca31-9e9b-409c-a2ff-191d71fb3cfd%2Fcdc5ed64-922f-4c42-8bb8-07c48be0a7b3%2Fu524vy8_processed.png&w=3840&q=75)
Transcribed Image Text:Use the following to answer questions (29) - (31):
In the town of “One Horse" there is one movie theater. Two groups of consumers, adults (A) and
children (C), attend this theater. Suppose the demand for movies by adults is given by:
QA = 50 - 0.50PA»
where PA is price of an adult movie ticket (in cents) and Q, is the number of movie tickets sold to adults at
the theater. Suppose the demand for movies by children is given by:
Qc= 20 - 0.50PC
where Pc is price of a children's movie ticket (in cents) and Qc is the number of movie tickets sold to
children at the theater. Also, imagine total cost is fixed at $450, thus making marginal cost of providing one
more movie ticket to either an adult or a child constant at zero.
[29]
charge a higher price to group A.
If the movie theater is able to price discriminate among its two groups of consumers, then it should
A.
True
В.
False
[30]
maximum profit is closest in value to:
If the movie theater is able to price discriminate among its two groups of consumers, then its
А.
$800
В.
$850
С.
$900
D.
$1200
[31]
group has the highest price elasticity of demand (in absolute value)?
If the movie theater is able to price discriminate among its two groups of consumers, then which
A.
A
В.
C
In a famous song by Dionne Warwick, Dionne sings "What's it all about Alfie? Is it just for the
[32]
moment we live?". Suppose Alfie responds, "No, I care as much about tomorrow as I do today".
Accordingly, from Alfie's perspective, his discount factor (8) equals:
A.
1
В.
С.
D.
-1
[33]
A firm must have some ability to control price to engage
in price discrimination.
A.
True
В.
False
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