HW4 - maximizing prices, quantities, consumer plus producer...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ECON 4697 IO & Regulation Spring 2008, Homework 4, Due April 10 Please prove & interpret answers when necessary. Q1. Cabral (2000; p. 164): review & practice question 9.5. Q2. Cabral (2000; p. 184): review & practice question 10.1. Q3. Cabral (2000; p. 185): review & practice question 10.6. Q4. Sarabeth Tucek, a monopoly singer/songwriter from New York City, identifies two customer types who attend her concerts. Adult demand is P A = 200 – q A and non- adult demand is P N = 100 – (1/2)q N . Her marginal cost (MC = AC) of playing music to an additional patron is 20. Assume price discrimination is possible. What are her profit
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: maximizing prices, quantities, consumer plus producer surpluses? Q5. Assume price discrimination is not possible for Sarabeth Tucek. What is her profit maximizing price, quantity, consumer and producer surplus (hint : you must construct Sarahbeth’s aggregate (kinked) demand curve from the horizontal sum of the individual demand curves for adults and non-adults which gives P = 133.33 – (1/3)Q for prices less than 100 and P = 200 – Q for prices above 100)? Does price discrimination increase welfare?...
View Full Document

This note was uploaded on 04/22/2009 for the course GEOL 1010 taught by Professor Pranter,ma during the Spring '07 term at Colorado.

Ask a homework question - tutors are online