46.Round-trip airline tickets are usually cheaper if you stay over a Saturday night before you fly back. What is the reason for this price discrepancy?a.Airlines are practicing imperfect price discrimination to raise their profits.b.Airlines charge a different rate based on the different nature of peoples' travel needs.c.Airlines are attempting to charge people based on their willingness to pay.d.All of the above are correct.47.Suppose that a professional photographer takes a prize-winning digital photo. She can sell a 5"x7" color print of the photo for $10. She can also sell the digital file for $20. There are 500 people willing to buy the color print and 2,000 people willing to buy the digital file. Assume the costs to the photographer are zero and that the people who purchase the digital file cannot resell the file itself or any prints made from it. What should she do in order to maximize her profits?
Black Box Cable TV is able to purchase an exclusive right to sell a premium movie channel (PMC) in its market area. Let's assume that Black Box Cable pays $150,000 a year for the exclusive marketing rights to PMC. Since Black Box has already installed cable to all of the homes in its market area, the marginal cost of delivering PMC to subscribers is zero. The manager of Black Box needs to know what price to charge for the PMC service to maximize her profit. Before setting price, she hires an economist to estimate demand for the PMC service. The economist discovers that there are two types of subscribers who value premium movie channels. First are the 4,000 die-hard TV viewers who will pay as much as $150 a year for the new PMC premium channel. Second, the PMC channel will appeal to 20,000 occasional TV viewers who will pay as much as $20 a year for a subscription to PMC.48.Refer to the Scenario above. If Black Box Cable TV is unable to price discriminate, what price will it choose to maximize its profit, and what is the amount of the profit?49.Refer to the scenario above. If Black Box Cable TV is able to price discriminate, what would be the maximum amount of profit it could generate?50.Refer to the scenario above. What is the deadweight loss associated with the non-discriminating pricing policy compared to the price discriminating policy?a.$375,000b.$400,000c.$475,000d.It cannot be determined from the information provided.
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