QUESTION1 1 points Save Answer A firm carries out price discrimination when it c

Question

QUESTION1 1 points Save Answer A firm carries out price discrimination when it charges O a. a higher price to consumers whose demand is more elastic. o b. a higher price when their marginal cost is lower O c. a lower price to consumers whose demand is more elastic. o d. the same price to all of their consumers. QUESTION 2 1 points Save Answer Because the demand for the matinee showing is showing, the demand curve for matinees is elastic than the demand for the evening than the demand for evening movie showings. EVENING MATINEE s9 13 view larger ima Oa. less, steeper O b.less, flatter more, flatter O d.more, steeper QUESTION 3 1 points Save Answer

Explanation / Answer

Question 1

C. Price discrimination involves charging different prices to different consumers depending on what they are willing to pay.

Question 2

C. more, flatter. It is more elastic because the price is lower. An elastic demand curve is flatter because a small change in price would lead to a large change in quantity demanded.

Question 3.

B. Price discrimination exists when the firm sells the same good at more than one price to different group of customers.

Question 4.

$6. If the fee is $6 all seven movie-goers will be willing to pay, the total revenue will be price x quantity = $6 x 7=$42.

If the fee is $7, only 5 people will see the movie, total revenue will be 5 x $7=$35.

If the fee is $8, only 4 people will see the movie, total revenue will be 4 x $8=$32.

If the fee is $9, only 3 people will see the movie, total revenue will be 3 x $9=$27.

If the fee is $10, only 2 people will see the movie, total revenue will be 2x $10=$20.

If the fee is $11, only 1 person will see the movie, total revenue will be 1x $11=$11.

So the maximum revenue of $42 is achieved by charging a ticket fee of $6.

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