As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P=20 - 0.001Q; on weekdays, it is P = 15 -0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 "royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case? O First degree price discrimination O Block pricing O Second degree price discrimination O Third degree price discrimination What price should you charge on weekends? Instructions: Enter your response rounded to two decimal places. $ What price should you charge on weekdays? Instructions: Enter your response rounded to two decimal places.
As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand on weekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movie theaters. On weekends, the inverse demand function is P=20 - 0.001Q; on weekdays, it is P = 15 -0.002Q. You acquire legal rights from movie producers to show their films at a cost of $25,000 per movie, plus a $2.50 "royalty" for each moviegoer entering your theaters (the average moviegoer in your market watches a movie only once). What type of pricing strategy should you consider in this case? O First degree price discrimination O Block pricing O Second degree price discrimination O Third degree price discrimination What price should you charge on weekends? Instructions: Enter your response rounded to two decimal places. $ What price should you charge on weekdays? Instructions: Enter your response rounded to two decimal places.
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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