Consider a live performance company. The company plans to provide a concert for four weeks. The estimated weekly demand functions are as follows: Week 1 2 3 Estimated Demand Function d(p) = 1000-10p d(p) = 900-8p d(p) = 800 - 6p d(p) = 600-4p The current capacity is 400 per week. Assume that the variable and fixed costs are zero. When the company uses variable prices (i.e., charges different prices for different weeks), how much it will increase the total profits compared to when the company uses a single price?

Consider a live performance company. The company plans to provide a concert for four weeks. The estimated weekly demand functions are as follows: Week 1 2 3 Estimated Demand Function d(p) = 1000-10p d(p) = 900-8p d(p) = 800 - 6p d(p) = 600-4p The current capacity is 400 per week. Assume that the variable and fixed costs are zero. When the company uses variable prices (i.e., charges different prices for different weeks), how much it will increase the total profits compared to when the company uses a single price?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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