F13 IM PS8 Solutions - Professor James A Hornsten ECON 202 Introduction to Microeconomics Northwestern University Fall 2013 Problem Set#8 Solutions

F13 IM PS8 Solutions - Professor James A Hornsten ECON 202...

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Professor James A. Hornsten Problem Set #8 Solutions ECON 202: Introduction to Microeconomics Pricing, Imperfect Competition & Antitrust Northwestern University Fall 2013 Due in class at 12:00PM, Monday, November 18 1. THIRD DEGREE PRICE DISCRIMINATION Suppose the total demand for movie tickets can be broken down into two segments. The adult segment is described by PA= 100 – QA, while the student segment is described by PS= 60 – ½QS. The constant marginal (and average total) cost of production is 20. The market is served by a monopoly. a. Find the profit if the monopoly does not distinguish the groups and just charges a uniform price of 50 to all customers. A . b. Find the profit if the monopoly does distinguish the groups and uses 3DPD. (It can prevent resale) .

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