Darmell owns a plot of land in the desert that isn\'t worth much. One day, a gia

Question

Darmell owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on flis property, making a large arater. The event scientists and tourists, and Darnell decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: (Market A) and tourists Darnell's marginal cost of providing admission tickets is zero. (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets. Market B Market A 20 18 16 14 0 36 9 12 15 18 21 24 27 30 0 3 69 12 15 18 21 24 27 30

Explanation / Answer

a) suppose that at first , Darnell charges the same price of $8 per admission in both markets so, that the total number of admissions demand is 24 tickets.

b) Darnell should charge $10 in market A, per admission and $6 per admission in market B. at these prices, he will sell a total quantity of 24 admission tickets per day.

c)  

d) darnell charges a higher price in the market with a relatively LOW price elasticity of demand.

pricing policy total revenue non discriminatory 172 discriminatory 204

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