12. Price-discriminating firmSimone owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists andtourists, and Simone 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 demand (D) curves and marginal revenue (MR) curves for the two markets. Simone's marginal cost ofproviding admission tickets is zero.PRICE (Dollars per ticket)100Market AMR47891 2 3QUANTITY (Admission tickets per day)D10(2)PRICE (Dollars per ticket)10Market BMR D81 2 3 4 5 6 79QUANTITY (Admission tickets per day)10 Suppose that at first, Simone charges the same price of $4 per admission in both markets so that the total number of admissions demanded isSuppose now that Simone decides to charge a different price in each market. To maximize revenue, Simone should charge $admission in Market A and Sper admission in Market B. At these prices, she will sell a total quantity oftickets per day.Complete the following table by calculating Simone's total revenue from selling in both markets under the nondiscriminatory as well as thediscriminatory price policy.Price PolicyNondiscriminatoryDiscriminatoryTotal RevenueS$Simone charges a higher price in the market with a relatively.price elasticity of demand.peradmission.

Price discrimination is a pricing strategy used by firms to charge different prices to different…

Simone owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists and tourists, and Simone 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 demand (D) curves and marginal revenue (MR) curves for the two markets. Simone's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 2 10 9 Market A MR ? PRICE (Dollars per ticket) 10 - Market B MR

Simone owns a plot of land in the desert that isn't worth much. One day, a giant meteor falls on her property. The event attracts scientists and tourists, and Simone 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 demand (D) curves and marginal revenue (MR) curves for the two markets. Simone's marginal cost of providing admission tickets is zero. PRICE (Dollars per ticket) 2 10 9 Market A MR ? PRICE (Dollars per ticket) 10 - Market B MR

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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