Suppose you'rethe manager of Babylon Jazz Bar. And, your bar has both young and adult customers. The demand for atypical adult customer is Q4 = 18– 3P and, for a typical young customers is Q' = 10 – 2P, where Q shows number of drinks and P shows price per drink. The marginal cost of a drink is 2-TL. And, you want to determine an entrance fee & a price per drink that maximize Babylon's profit. a. What will be the fees (entrance & per drink) for adult customers, and number of drinks? b. What will bethe fees for young customers, and number of drinks? c. What is the profit of Babylon if there are 100 customers in each group?

Suppose you'rethe manager of Babylon Jazz Bar. And, your bar has both young and adult customers. The demand for atypical adult customer is Q4 = 18– 3P and, for a typical young customers is Q' = 10 – 2P, where Q shows number of drinks and P shows price per drink. The marginal cost of a drink is 2-TL. And, you want to determine an entrance fee & a price per drink that maximize Babylon's profit. a. What will be the fees (entrance & per drink) for adult customers, and number of drinks? b. What will bethe fees for young customers, and number of drinks? c. What is the profit of Babylon if there are 100 customers in each group?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.5P

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