ECON oct 14

ECON oct 14 - Qc=7-Pc QA=9-Pa 1. Inverse a. Pc=7-Qc Pa=9-Qa...

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Unformatted text preview: Qc=7-Pc QA=9-Pa 1. Inverse a. Pc=7-Qc Pa=9-Qa MC=1 2. MR a. MRc=7-2Qc MRA=9-2QA 3. MR=MC C: 7-2Qc=1 Q*C=3 A: 9-2QA=1 Q*A=4 4. Sub back into demand a. P*C=7-3=4 P*A=9-4=5 Elasticity: Ec=∆QdP∙P*Q*=-1∙43=-43 EAdults (demand)=-1∙54=-54 -54<-43 adults Children inelastic Elastic b. c. d. Common Price for both groups e. Qc=7-P QA=9-P _______________________ f. QT=QC+QA=16-2p Inverse p=8-12Q MRT=8-Q MRT=MC 9-Q=1 Q*=7 Substitute back into total demand P*common=8-12Q =8-72=4.5 Summary Third degree price discrimination P*c=4 child P*A=5 (adult) g. Common P*Common=4.5 Gain in Profits TDPD: pi= *4+4*5-3+41 3 Common pi=7*4.-7(1) h. Eo= -2 (march), -4 (april) i. j. Same MC PaPm=1+1Em1+1Ea=1+1-21+1-4=1234=23 PA-PMPM=PAPM-1=23-1=-13 30% discount for april skiers k. l. Suppose there is just one type of consumer, whose demand for r ides at the PNE is g iven by Qd = 16 – 4P. The marginal cost of supplying a r ide is $2. Assuming the P NE is a monopolist, what is the optimal up-front / admission price and the optimal price per r ide? m. Qd=16-4p MC=2 1.) P*→Price per Ride 2.)Admission P*=MC=2 INVERSE:p=4-14Q When p=2 Q=16-42=8 Admission=CS =124-28=8 n. o. ...
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ECON oct 14 - Qc=7-Pc QA=9-Pa 1. Inverse a. Pc=7-Qc Pa=9-Qa...

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