A museum asked you to help them price their tickets. They have two types of consumers: students and non-students. The inverse demand from students is...
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A museum asked you to help them price their tickets. They have two

types of consumers: students and non-students. The inverse demand from students is 𝑃s = 10 − 𝑄s. The demand from non-students is 𝑃ns = 20 − 𝑄ns. The museum has a marginal cost of zero.


a. Suppose the museum can charge different prices to students and non-students. What prices should it charge to maximize profits? [8 points]
b. What are the demand elasticities in each market at the optimal prices? Briefly explain. [8 points]
c. Calculate the deadweight loss among students and non-students. [6 points]
d. Suppose the museum does not allow you to charge different prices from students and non-students. What price should the museum charge to maximize profits? [8 points]

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