Suppose that at first, Edison charges the same price of $8 per admission in both markets so that the total number of admissions demanded is tickets. Suppose now that Edison decides to charge a different price in each market. To maximize revenue, Edison should charge $ Market A and $ per admission in Market B. At these prices, he will sell a total quantity of admission tickets per day. Complete the following table by calculating Edison'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) Edison charges a higher price in the market with a relatively per admission in price elasticity of demand.
Suppose that at first, Edison charges the same price of $8 per admission in both markets so that the total number of admissions demanded is tickets. Suppose now that Edison decides to charge a different price in each market. To maximize revenue, Edison should charge $ Market A and $ per admission in Market B. At these prices, he will sell a total quantity of admission tickets per day. Complete the following table by calculating Edison'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) Edison charges a higher price in the market with a relatively per admission in price elasticity of demand.
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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