Suppose that the demand curve for movies for college students isQ, = 80 - 1.00p100and for other town residents is90-80Q2 = 20 - 0.25p.70-The town's total demand curve is6050-E 40-30-2060Q, Movies204080100120System Preferenceswww 1tv30MacBook AirDIIDD80F10F9F8escF7F5F6F1F2F3@23$2345791QWRYUP. Price per movie* CO

As per the law of demand, price has an inverse relationship with quantity demanded.

Answered: Suppose that the demand curve for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The director of a recreation center in a small college town is considering changing the way he prices access cards. He has hired an economic consulting firm to estimate the demand for access cards. The firm has classified people who go the recreation center into two groups, and has come up with two demand functions. The demand curves for the general public (Q) and students (Q,) are given below: Q = 700 – 4P Q, = 1,300 – 5P a. If the current price of access cards is $100, identify the quantity demanded by each group. b. Find the price elasticity of demand for each group at the current price and quantity. c. Is the director maximizing the revenue he collects from card sales by charging $100 for each card? Explain. d. What price should he charge each group if he wants to maximize revenue collected from card sales? Check whether the new total revenue is indeed greater than the old one.
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Suppose that the demand curve for movies for college students is Q, = 80 - 1.00p and for other town residents is Q2 = 20 - 0.25p. The town's total demand curve is