Eric 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 Eric decides to sell nontransferable admissiontickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The followinggraphs show daily demand (DD) curves and marginal revenue (MRMR) curves for the two markets. Eric's marginalcost of providing admission tickets is zero.PRICE (Dollars per ticket)201816909200 1Market AMR2 3 4 5 6 7 8QUANTITY (Admission tickets)Pricing PolicyNondiscriminatoryDiscriminatoryD0 10Total Revenue(Dollars)PRICE (Dollars per ticket)201818141210842001lowMarket BImagine that at first, Eric charges the same price of $8 per admission in both markets so that the total number of admissionsdemanded isTickets.Imagine now that Eric decides to charge a different price in each market. To maximize revenue, Eric should charge$_______ per admission in Market A and $_________ per admission in Market B. At these prices, he will sell a totalquantityof admission tickets per day.MRD2 3 4 5 6 7 8QUANTITY (Admission tickets)Complete the following table by calculating Eric's total revenue from selling in both markets under thenondiscriminatory as well as the discriminatory price policy.0 10Eric charges a lower price in the market with a relatively high price elasticity of demand.

A monopoly can either charge uniform price or can charge according to different markets

Imagine that at first, Eric charges the same price of $8 per admission in both markets so that the total number of admissions demanded is Tickets. Imagine now that Eric decides to charge a different price in each market. To maximize revenue, Eric should charge per admission in Market B. At these prices, he will sell a totalquantity. per admission in Market A and $ admission tickets per day. $ of Complete the following table by calculating Eric's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Pricing Policy Nondiscriminatory Discriminatory Total Revenue (Dollars) low Eric charges a lower price in the market with a relatively high price elasticity of demand.

Imagine that at first, Eric charges the same price of $8 per admission in both markets so that the total number of admissions demanded is Tickets. Imagine now that Eric decides to charge a different price in each market. To maximize revenue, Eric should charge per admission in Market B. At these prices, he will sell a totalquantity. per admission in Market A and $ admission tickets per day. $ of Complete the following table by calculating Eric's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Pricing Policy Nondiscriminatory Discriminatory Total Revenue (Dollars) low Eric charges a lower price in the market with a relatively high price elasticity of demand.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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