Suppose seven individuals enjoy going to the comedy club. Their demand is as follows. Suppose the...

Suppose seven individuals enjoy going to the comedy club. Their demand is as follows.
Person Willingness to pay Allison Beatrice Cally David Ezekiel Francesca Gertrude 40 36 32 28 24 20 16

Suppose the comedy club had a monopoly and a marginal cost of $7 per entrant. Suppose the club could perfectly price-discriminate. That is, it could charge each customer a different price equal to his or her maximum willingness to pay. How many tickets would the comedy club sell?

Solutions

Expert Solution

The club will sell tickets at a price that is higher than its marginal cost. So, the minimum ticket price is $7. Since all consumers have a willingness to pay that is higher than $7, charging a price of, for example $8, will make all the consumers purchase a ticket. Therefore,

Club will sell 7 tickets.

Rahul Sunny answered 2 years ago

Next > < Previous

Related Solutions

Suppose seven individuals enjoy going to the comedy club. Their demand is as follows. Person Willingness...

Suppose seven individuals enjoy going to the comedy club. Their demand is as follows. Person Willingness to pay Allison 60 Beatrice 54 Cally 48 David 42 Ezekiel 36 Francesca 30 Gertrude 24 If the comedy club had a monopoly and a marginal cost of $7 per entrant, the comedy club would sell_____ tickets if it could charge only one price.

What do you mean by Budget? Suppose you are going to enjoy your summer holidays in France....

What do you mean by Budget? Suppose you are going to enjoy your summer holidays in France. Make an expected budget keeping in mind all of your requirements.

Gem E. Fallon LLP (GEF) is currently evaluating an investment in a new comedy club. The...

Gem E. Fallon LLP (GEF) is currently evaluating an investment in a new comedy club. The club is expected to last for 4 years and generate a CF1 = $11,000, CF2 = $9,680, CF3 = $10,648, and CF4 = $58,564. The initial outlay is $20,000. Using a required return of 10%, calculate the discounted payback period for GEF's comedy club. (All answers below are expressed in years.) (a) 2.19 (b) 2.25 (c) 2.00 (d) 1.93 (e) 3.00

Gem E. Fallon LLP (GEF) is currently evaluating an investment in a new comedy club. The...

Q.4. What do you mean by Budget? Suppose you are going to enjoy your summer holidays...

Q.4. What do you mean by Budget? Suppose you are going to enjoy your summer holidays in France. Make an expected budget keeping in mind all of your requirements.

On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.4 million stock options to key...

On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.4 million stock options to key executives exercisable for 1.4 million shares of the company’s common stock at $30 per share. The stock options are intended as compensation for the next three years. The options are exercisable within a four-year period beginning January 1, 2021, by the executives still in the employ of the company. No options were terminated during 2018. The market price of the common stock was $32...

4. Suppose that 78% of people enjoy drinking coffee and 44% of people enjoy drinking tea....

4. Suppose that 78% of people enjoy drinking coffee and 44% of people enjoy drinking tea. In addition, 39% of people that enjoy drinking coffee also enjoy drinking tea. Let C represent the event that a person enjoys drinking coffee, and T represent the event that a person enjoys drinking tea. In each part of this question, you must first express each probability in terms of the events C and T and justify any computation through the use of a...

Suppose that demand and supply for a competitive market are as follows: Qd = 320 -...

Suppose that demand and supply for a competitive market are as follows: Qd = 320 - P and Qs = -40 + 2P What would be the price and output combination that would result if firms in this market merged together to become a profit maximizing monopolist? By how much would the price change from the competitive level?

Suppose the demand and marginal cost equations for a monopolist are as follows: Q = 6600...

Suppose the demand and marginal cost equations for a monopolist are as follows: Q = 6600 – 2P MC = 2Q. a. Find the inverse demand equation and the marginal revenue equation. b. Find the profit maximizing quantity and price for this monopolist (remember to set MR = MC and solve for Q).

Suppose that a market analysis shows that the demand and supply equations for the market are as follows

Suppose that a market analysis shows that the demand and supply equations for the market are as follows: Qd=120-4P; Qs=6P. Find the equilibrium price and quantity in this market. Now, using graph paper, plot the demand and supply curves carefully and verify that the curves intersect at the equilibrium price and quantity that you found. On your graph, be sure to label your axes and clearly indicate the quantity and price intercept values. (Graph paper is required for this problem;...

Subjects