ErdemS (ES) is a monopoly selling tickets for the football match of SileSpor. The demand for...

ErdemS (ES) is a monopoly selling tickets for the football match of SileSpor. The demand for each ticket is P = 350 - Q. ES’s cost is $10,000 plus $50 per ticket. (i.e., C(Q)=10.000+50Q ).

a) What is the profit-maximizing price that ES will charge? How many tickets will be sold? What is ES’s profit for this match?

b) Next ES finds out that non-students (Type A) and students (Type B) have different demands: Let P_A = 650 - 5Q_A stand for the demand function of Type A; and let P_B =350-3Q_B stand for the demand function of Type B. Suppose that ES utilizes price discrimination and asks different prices to each type.

What is the price charged to a non-student (Type A)? What is the price charged to a student (Type B)? How many of each type are on this match? What would ES’s profit be for this match?

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Expert Solution

Rahul Sunny answered 3 hours ago

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