A basketball club is the only one in its region and is therefore able to behave like a monopolist. It sells tickets to Adults (A) and Juniors (J), whose demand curves are given by: Pa = 120 — Qa Pj = 60 — Qi Additionally, the club's total costs are given by TC = 10Q The club hires an economist to consider its pricing strategy and receives the advice that it should charge different prices to each type of supporter. Find the prices it sets in both markets, the sales (output) in each and its overall level of profit and illustrate profit maximising outputs and prices of each consumer type on a graph
A basketball club is the only one in its region and is therefore able to behave like a monopolist. It sells tickets to Adults (A) and Juniors (J), whose demand curves are given by: Pa = 120 — Qa Pj = 60 — Qi Additionally, the club's total costs are given by TC = 10Q The club hires an economist to consider its pricing strategy and receives the advice that it should charge different prices to each type of supporter. Find the prices it sets in both markets, the sales (output) in each and its overall level of profit and illustrate profit maximising outputs and prices of each consumer type on a graph
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A basketball club is the only one in its region and is therefore able to behave like a monopolist. It sells tickets to Adults (A) and Juniors (J), whose demand
Pa = 120 — Qa
Pj = 60 — Qi
Additionally, the club's total costs are given by TC = 10Q
The club hires an economist to consider its pricing strategy and receives the advice that it should charge different prices to each type of supporter. Find the prices it sets in both markets, the sales (output) in each and its overall level of profit and illustrate profit maximising outputs and prices of each consumer type on a graph (one graph for each type of consumer). Calculate
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