The Star Theater is the only movie theater in Hollywood, SC, and therefore it has price-settingpower. The Star Theater has two distinct types of customers: (i) senior citizens and (ii) non-seniorcitizens.The demand curve among senior citizens is: y₁ = 100-10p₁, for p₁ 10, where y₁ is thenumber of seats demanded by senior citizens at a senior citizen ticket price of p1.The demand curve among non-senior citizens is: y2 = 140-10p2, for p2 14, where y2 is thenumber of seats demanded by non-senior citizens at a non-senior citizen ticket price of p2.The Star Theater's cost function is C(31, 32) = C(y1 + y2) = F + (y1 + y2), where F is thefixed cost of operating the theater and y₁ and y2 are (as already defined) the number of seniorcitizen and non-senior citizen customers, respectively.By how much does the Star Theater increase profits if it operates as a third-degree pricediscriminator instead of as a single-price monopolist?$0$10$20$30

The objective of the question is to determine the increase in profits for the Star Theater if it…

Answered: The Star Theater is the only movie…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 4. The price is a function of demand given as p(q) = 2.5 ln(300). Use the elasticity function to find the price for this product that generates the highest revenue.
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and the cost function of the second firm is , where are all positive parameters. The demand function in this industry is where α C(q₁) = A * qu C(92) = Bq₂ (A, B, a, ß) Q = Dp (D,y)
The demand function for product is p = -4q+400 and the average cost for producing q units 500 is c = 37q + 40 + where p= price, and q= quantity demand. 2 9 1. 2. 3. 4. Compute the point elasticity of demand and find the intervals where the demand is inelastic, elastic, and the price for which the demand is unit elastic. Find the quantity that maximizes the total revenue and the corresponding price. Interpret your result. Find the quantity that minimizes the average cost function and the corresponding price. Interpret your results. What are the quantity and the price that maximize the profit? What is the maximum profit? Interpret your result.
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ABC Manufacturing has determined that the demand function for their glow-in-the-dark headbands is given 2 by: D(p) = 160-p². a. Find E(p), the Elasticity of Demand as a function of price, p. E(p) b. Find the Elasticity of Demand when glow-in-the-dark headbands are selling at a price of $9. Give result accurate to at least 3 decimal places. E(9) = = c. At this price ($9): We would say the demand for glow-in-the-dark headbands is: Select an answer Based on this, in order to increase revenue we should: [Select an answer P = d. Use the Elasticity model to determine the price that maximizes revenue. (Round result to 2 decimal places.)
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PRICE (Dollars per room) 500 450 400 350 300 250 200 150 100 50 0 Demand 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Graph Input Tool Market for Triple Sevens's Hotel Rooms Price (Dollars per room) Quantity Demanded (Hotel rooms per night) Demand Factors Average Income (Thousands of dollars) Airfare from LAX to LAS (Dollars per roundtrip) Room Rate at Exhilaration (Dollars per night) 350 150 50 250 200 For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $350 per room per night. If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Triple Sevens rooms per night. Therefore, the income elasticity of demand is from rooms per night to , meaning that hotel rooms at the Triple Sevens are If the price of an airline ticket from LAX to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors…
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