Following information shows that a firm offering a good at different prices   to groups of consumers with different levels of willingness to pay.   Inverse Demand for movies: P1 = 20 – 4Q1   Inverse Demand for students: P2 = 10 – Q2   MC = 4Q LKR /ticket   (a) What price and quantity and maximizes profits if the firm charges each   market?   (b) Demonstrate that charging

Q: There are two movie theaters in the town of Harkinsville: Modern Multiplex (Firm 1) and Galaxy (Firm…

A: GIVEN      Q1 =125 -  3.5P1 + 2P2 and Q2 =125 - 3.5P2 + 2P1

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A: Qgp=700-4P Qs=1,300-5P Price=P=$100 so, Quantity demanded by each group = Qgp=700-4P=700-400=300…

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A: Xa = Max{0,20-2p}  Xb = Max{0,30-2p} P = 40

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