The following table outlines the demand for Bill\'s Theatre. Bill\'s Theatre att

Question

The following table outlines the demand for Bill's Theatre. Bill's Theatre attracts two different groups of customers: teenagers and parents with small children a) Fill in the total revenues for the various demand schedules in the table Teenagers Teenagers Parents Parents Both Admission Quantity Total Quantity Total Total Price Demanded Revenue Demanded Revenue Revenue 100 152 186 208 6 231 237 241 19 29 42 59 81 b) If Bill's Theatre were to charge a single price and wants to maximize their total revenue, what price should be charged and what would the total revenue be? Price Total Revenue $0 $0 c) Now, if Bill's Theatre was able to price discriminate between the two groups and charge different prices to each, what would they charge each, and what would the new total revenue be? Price to Teenagers S0 Price to Parents = $0 Total Revenue = $0

Explanation / Answer

Ans:

Total revenue = Quantity demanded * Price

Table showing total revenue at different demand schedules

b) Single price to maximize total revenue

Price = $6

Total Revenue = $1182

c) Price discrimination between two groups

Price to teenagers = $6

Price to parents = $3

New Total revenue = ($6 * 186) + ($3 * 42)

= $1116 + $126

= $1242

Price Teenager quantity demanded Teenagers total revenue Parents quantity demanded Parents total revenue Both total revenue 8 100 800 0 0 800 7 152 1064 5 35 1099 6 186 1116 11 66 1182 5 208 1040 19 95 1135 4 222 888 29 116 1004 3 231 693 42 126 819 2 237 474 59 118 592 1 241 241 81 81 322

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.