19. Price-discriminating monopolist Andrew owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on his property, making a large crater. The event attracts scientists and tourists, and Andrew 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 daily demand (D) curves and marginal revenue (MR) curves for the two markets. Andrew's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 20 18 16 14 12 10 8 4 2 Market A ? PRICE (Dollars per ticket) 20 18 16 14 12 10 8 NO 0 0 4 2 D A 0 MR 0 + + 0 1 2 3 4 5 6 7 8 10 QUANTITY (Admission tickets) Market B MR B D B 0 1 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 ? Suppose now that Andrew decides to charge a different price in each market. To maximize revenue, Andrew should charge $ Market A and $ per admission in Market B. At these prices, he will sell a total quantity of admission tickets per day. Complete the following table by calculating Andrew's total revenue from selling in a market under the discriminatory price policy. per admission in
19. Price-discriminating monopolist Andrew owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on his property, making a large crater. The event attracts scientists and tourists, and Andrew 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 daily demand (D) curves and marginal revenue (MR) curves for the two markets. Andrew's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 20 18 16 14 12 10 8 4 2 Market A ? PRICE (Dollars per ticket) 20 18 16 14 12 10 8 NO 0 0 4 2 D A 0 MR 0 + + 0 1 2 3 4 5 6 7 8 10 QUANTITY (Admission tickets) Market B MR B D B 0 1 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 ? Suppose now that Andrew decides to charge a different price in each market. To maximize revenue, Andrew should charge $ Market A and $ per admission in Market B. At these prices, he will sell a total quantity of admission tickets per day. Complete the following table by calculating Andrew's total revenue from selling in a market under the discriminatory price policy. per admission in
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter13: Between Competition And Monopoly
Section: Chapter Questions
Problem 5DQ
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Transcribed Image Text:19. Price-discriminating monopolist
Andrew owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on his property, making a large crater. The event
attracts scientists and tourists, and Andrew 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 daily demand (D) curves and marginal revenue (MR) curves for the two markets.
Andrew's marginal cost of providing admission tickets is zero.
PRICE (Dollars per ticket)
20
18
16
14
12
10
8
4
2
Market A
?
PRICE (Dollars per ticket)
20
18
16
14
12
10
8
NO 0 0 4 2
D
A
0
MR
0
+ +
0
1
2 3 4 5 6 7 8
10
QUANTITY (Admission tickets)
Market B
MR
B
D
B
0 1 2 3 4 5 6 7 8
QUANTITY (Admission tickets)
9
10
?
Suppose now that Andrew decides to charge a different price in each market. To maximize revenue, Andrew should charge $
Market A and $
per admission in Market B. At these prices, he will sell a total quantity of
admission tickets per day.
Complete the following table by calculating Andrew's total revenue from selling in a market under the discriminatory price policy.
per admission in
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