Norah Jones’ (famous for the songs “Come Away With Me” and “Don’t Know Why”) last national concert tour sold an average of 2/3 of the tickets available, with 1/3 of seats 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. 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 would be considered in determining the profit maximizing price? (B.) Does the failure to sell out a concert suggest that the concert venue set too high a price? Does the failure to sell out a concert imply that there is deadweight loss? Explain. (C.) How (if at all) does the size of Norah Jones’ flat payment influence the profit maximizing price? Explain. (D.) How would your answers change if the concert hall is able to perfectly* price discriminate (implying they can charge each consumer their maximum willingness to pay.) Would the concert hall be able to sell out each concert?
Norah Jones’ (famous for the songs “Come Away With Me” and “Don’t Know Why”) last national concert tour sold an average of 2/3 of the tickets available, with 1/3 of seats 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. 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 failure to sell out a concert suggest that the concert venue set too high a price? Does the failure to sell out a concert imply that there is
(C.) How (if at all) does the size of Norah Jones’ flat payment influence the profit maximizing price? Explain.
(D.) How would your answers change if the concert hall is able to perfectly*
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