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A movie theater faces the following hourly inverse demand curves:Seniors: PS= 12 – 0.5QAdults: Pa= 19...

A movie theater faces the following hourly inverse demand curves:Seniors: PS= 12 – 0.5QAdults: Pa= 19 – QThe marginal cost is constant at $1.

a.If the movie theater uses segmenting, calculate the ticket prices charged to adults and seniors.

b.How much producer surplus does the movie theater earn from segmenting?

c.Now suppose the movie theater is legally prevented from using segmenting. What price will the movie theater charge per ticket? How much producer surplus will it earn?

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Expert Solution

Rahul Sunny answered 2 years ago
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