Juanita owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event attracts scientists and tourists, and Juanita decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets. Juanita's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 20 18 16 14 12 10 Market A PRICE (Dollars per ticket) 20 18 16 14 29 6 Market B 4 2 2 MR DA MR D. 0 0 + + + 0 1 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 01 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 (?) Imagine that at first, Juanita charges the same price of $8 per admission in both markets so that the total number of admissions demanded is tickets. Imagine now that Juanita decides to charge a different price in each market. To maximise revenue, Juanita should charge S Market A and S per admission in Market B. At these prices, she will sell a total quantity of per admission in admission tickets per day. Complete the following table by calculating Juanita'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) Juanita charges a lower price in the market with a relatively price elasticity of demand.
Juanita owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event attracts scientists and tourists, and Juanita decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets. Juanita's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 20 18 16 14 12 10 Market A PRICE (Dollars per ticket) 20 18 16 14 29 6 Market B 4 2 2 MR DA MR D. 0 0 + + + 0 1 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 01 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 (?) Imagine that at first, Juanita charges the same price of $8 per admission in both markets so that the total number of admissions demanded is tickets. Imagine now that Juanita decides to charge a different price in each market. To maximise revenue, Juanita should charge S Market A and S per admission in Market B. At these prices, she will sell a total quantity of per admission in admission tickets per day. Complete the following table by calculating Juanita'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) Juanita charges a lower price in the market with a relatively price elasticity of demand.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Juanita owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event attracts scientists and tourists, and Juanita decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MIR) curves for the two markets.
Juanita's marginal cost of providing admission tickets is zero.
Transcribed Image Text:Juanita owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event
attracts scientists and tourists, and Juanita decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists
(Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets.
Juanita's marginal cost of providing admission tickets is zero.
PRICE (Dollars per ticket)
20
18
16
14
12
10
Market A
PRICE (Dollars per ticket)
20
18
16
14
29
6
Market B
4
2
2
MR
DA
MR D.
0
0
+
+
+
0 1
2 3 4 5 6 7 8
QUANTITY (Admission tickets)
9 10
01
2 3 4 5 6 7 8
QUANTITY (Admission tickets)
9 10
(?)
Imagine that at first, Juanita charges the same price of $8 per admission in both markets so that the total number of admissions demanded is
tickets.
Imagine now that Juanita decides to charge a different price in each market. To maximise revenue, Juanita should charge S
Market A and S per admission in Market B. At these prices, she will sell a total quantity of
per admission in
admission tickets per day.
Complete the following table by calculating Juanita'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)
Juanita charges a lower price in the market with a relatively
price elasticity of demand.
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