**Exhibit: P. Discrim1 Analysis**In this graph, we have a depiction of price discrimination by an airline, which lists different prices for two types of passengers. Here’s a detailed breakdown:- **Axes:** - The vertical axis represents Price. - The horizontal axis represents Quantity (Q).- **Lines:** - **Demand (D) Line**: Indicates the overall demand for the airline's services. - **Marginal Revenue (MR) Line**: Shows the additional revenue from selling one more unit (or ticket). - **Marginal Cost (MC) Line**: This is constant and horizontal, representing the cost of providing one more unit.- **Points and Areas:** - **Pm and Pc**: Prices paid by different passenger groups. - **Pm = $100**: The price on the left side of the diagram. - **Pc = $50**: The price on the right. - **Qm and Qc**: Quantities purchased at these respective prices. - **Qm = 50**: Quantity at price Pm. - **Qc = 200**: Quantity at price Pc.- **Given Information:** - **MC = $35**: The marginal cost for each additional ticket. - **Question:** - The task is to calculate total profits based on the given data and choose the correct answer from the options provided: - $6,250 - $6,550 - $6,350 - $6,450**Reference to Exhibit P.Discrim1:**The airline's profit calculation involves analyzing costs and revenues derived from each passenger group to determine total profit. To find the most accurate figure, consider subtracting the total costs from total revenues.

Profit 1 = Price – ATC * qty = 100 – 35 * 50 = 3250 Profit 2 = Price – ATC * qty = 50 - 35 * 200 =…

Price Exhibit: P.Discrim1 Given: $100 Pc = $50 50 Pm = Pm Qm = 200 Qc MC =S35 Pc MC MR MR Qm Qc Refer to Exhibit P.Discrim1. The airliner flies two types of passengers who paid different air fares. Its total profits is about O $6,250 O $6,550 $6,350 O $6,450

Price Exhibit: P.Discrim1 Given: $100 Pc = $50 50 Pm = Pm Qm = 200 Qc MC =S35 Pc MC MR MR Qm Qc Refer to Exhibit P.Discrim1. The airliner flies two types of passengers who paid different air fares. Its total profits is about O $6,250 O $6,550 $6,350 O $6,450

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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