Consider the movie ticket and popcorn example discussed in Section 17.7. The theater sells two products,...

Consider the movie ticket and popcorn example discussed in Section 17.7. The theater sells two products, tickets and popcorn. Suppose the weekly demand for movie tickets is

          Qdtix=500−25Ptix−20Ppopcorn,

where P_tix and P_p_opcorn are the prices of a ticket and a bag of popcorn, respectively. Suppose that each time a moviegoer buys a ticket, his demand for popcorn is

          Qdpopcorn=3−0.4Ppopcorn,

where Q^d_popcorn is the number of bags of popcorn the moviegoer buys. Suppose further that the theater's marginal cost of a ticket is $2, while the marginal cost of popcorn is $3.

Instructions: Round your answer to 2 decimal places.

a. What is the profit-maximizing price of a movie ticket if a bag of popcorn sells for $5 a bag?

    $.

Solutions

Expert Solution

Colby Messinger answered 1 year ago

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