As a manager of a chain of movie theaters that are monopolies in their respective markets, you have noticed much higher demand onweekends than during the week. You therefore conducted a study that has revealed two different demand curves at your movietheaters. On weekends, the inverse demand function is P= 20 – 0.001Q; on weekdays, it is P= 12 – 0.002Q. You acquire legal rightsfrom movie producers to show their films at a cost of $25,000 per movie, plus a $3.00 “royalty" for each moviegoer entering yourtheaters (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 discriminationO Third degree price discriminationO Second degree price discriminationO Block pricingWhat 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.

*Answer: Price discrimination is a selling technique that charges clients various prices for a…

is, the inverse demand function is P= 20 – 0.001Q, on weekdays, it is P=12 – 0.002Q. You acquire sto show their films at a cost of $25,000 per movie, plus a $3.00 "royalty" for each moviegoer ente moviegoer in your market watches a movie only once). trategy should you consider in this case? price discrimination price discrimination ee price discrimination u charge on weekends? ur response rounded to two decimal places. u charge on weekdays? ur response rounded to two decimal places.

is, the inverse demand function is P= 20 – 0.001Q, on weekdays, it is P=12 – 0.002Q. You acquire sto show their films at a cost of $25,000 per movie, plus a $3.00 "royalty" for each moviegoer ente moviegoer in your market watches a movie only once). trategy should you consider in this case? price discrimination price discrimination ee price discrimination u charge on weekends? ur response rounded to two decimal places. u charge on weekdays? ur 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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part D E
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