Assume you are the owner of a concert hall with 6,000 seats. The demand function for seat tickets is Q = 10,000 -
200P where Q is the quantity demanded and P is the price for a seat ticket. You are charging $30 per ticket and selling tickets to 4,000 consumers. Further assume that you incurred only fixed costs. Is charging $30 the optimal pricing policy? (5 points) What other pricing policy might you use to increase your profits? (10 points) Could you increase profits through price discrimination? If so, what type of price discrimination should you use?
Q = 10,000 - 200P 200P = 10,000 - Q P = 50 - 0.005Q Since only fixed costs are incurred, Marginal cost (MC) is zero. (a)... View the full answer