The movie theater in Glendon has two types of customers: domestic students (group 1) andinternational students (group 2). At a price of p, cents, the number of movie tickets that domesticstudents are willing to buy per year is given by: q₁-170-0.7p₁. At a price of p₂ cents, the number of movietickets that international students are willing to buy per year is given by: q₂-87-0.3p2. The total costs forthe movie theater depend on the total number of tickets sold, 9₁+92, and are given by the following totalcost function C(q₁+q₂)=(9₁ +9₂) ².Suppose that the movie theater can identify which students are domestic and which students areinternational, and students are unable to resell movie tickets to each other. This enables the theater tocharge different prices to domestic vs international students.How do the cinema's profits change with this new pricing strategy? In other words, how much are theprofits with uniform pricing, minus the profits with differentiated pricing?

The movie theater wants to maximize the number of tickets sold, so it will charge the price that…

Suppose that the movie theater can identify which students are domestic and which students are international, and students are unable to resell movie tickets to each other. This enables the theater to charge different prices to domestic vs international students. How do the cinema's profits change with this new pricing strategy? In other words, how much are the profits with uniform pricing, minus the profits with differentiated pricing?

Suppose that the movie theater can identify which students are domestic and which students are international, and students are unable to resell movie tickets to each other. This enables the theater to charge different prices to domestic vs international students. How do the cinema's profits change with this new pricing strategy? In other words, how much are the profits with uniform pricing, minus the profits with differentiated pricing?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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