In Norah Jones’ (you know, the musical artist who created the hit songs “Come Away With Me” and “Don’t Know Why”) national concert tour she sold an average of 2/3 of the tickets available, meaning 1/3 of seats were left empty at a typical concert. a. Suppose the local promoter of each concert is a monopolist with a fixed number of seats in each concert hall. Also suppose the promoter’s cost is independent of the number of people who attend the concert (Norah Jones received a flat payment independent of the number of tickets sold). If the concert charges a single market price, what factors are considered in determining the profit maximizing price? Would the failure to sell out the concert suggest that the monopoly set too high a price? b. Does the amount of Norah Jones’ flat payment influence the profit maximizing price? Explain. c. How do your answers to part a. change if the concert hall can perfectly* price discriminate? *In reality nothing is ever actually perfect, not even at a Norah Jones concert
In Norah Jones’ (you know, the musical artist who created the hit songs “Come Away With Me” and “Don’t Know Why”) national concert tour she sold an average of 2/3 of the tickets available, meaning 1/3 of seats were left empty at a typical concert.
a. Suppose the local promoter of each concert is a monopolist with a fixed number of seats in each concert hall. Also suppose the promoter’s cost is independent of the number of people who attend the concert (Norah Jones received a flat payment independent of the number of tickets sold). If the concert charges a single market
b. Does the amount of Norah Jones’ flat payment influence the profit maximizing price? Explain.
c. How do your answers to part a. change if the concert hall can perfectly*
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