Business, 07.11.2019 05:31 torrejes241

College students have a reservation price of $22 for movie tickets. senior citizens have a reservation price of $88.

if the price of a movie ticket is $88 or less, then 10 senior citizens will demand a ticket. however, no senior citizens will demand a ticket at prices above $88.

if the price of a movie ticket is $22 or less, then 25 college students will demand a ticket. however, no college students will demand a ticket at prices above$22.

given the information in the table, if a movie theater does not price discriminate, then it charges either the highest price the college students are willing to pay or the one that the senior citizens are willing to pay. the theater would practice price discrimination by charging college students $22 and senior citizens $88.

assume the firm incurs no fixed costs and the marginal cost of production is zero.

how does total surplus change if the movie theater goes from charging a single price to perfectly price discriminating?

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