Crystal owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event attracts scientists and tourists, and Crystal decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets. Crystal's marginal cost of providing admission tickets is zero. 20 18 16 14 12 10 10 PRICE (Dollars per ticket) 88 4 4 Market A (?) 20 20 18 16 16 14 12 10 PRICE (Dollars per ticket) 9 4 Market B ? 2 2 MR A DA MRB DB 0 0 0 1 2 3 4 5 6 7 8 9 10 0 1 QUANTITY (Admission tickets) 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 Suppose that at first, Crystal charges the same price of $8 per admission in both markets so that the total number of admissions demanded tickets. is Suppose now that Crystal decides to charge a different price in each market. To maximize revenue, Crystal should charge $ Market A and $ per admission in Market B. At these prices, she will sell a total quantity of per admission in admission tickets per day. Complete the following table by calculating Crystal's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Pricing Policy Nondiscriminatory Discriminatory Total Revenue (Dollars) Crystal charges a lower price in the market with a relatively price elasticity of demand. Grade It Now Save & Continue Continue without saving
Crystal owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event attracts scientists and tourists, and Crystal decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists (Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets. Crystal's marginal cost of providing admission tickets is zero. 20 18 16 14 12 10 10 PRICE (Dollars per ticket) 88 4 4 Market A (?) 20 20 18 16 16 14 12 10 PRICE (Dollars per ticket) 9 4 Market B ? 2 2 MR A DA MRB DB 0 0 0 1 2 3 4 5 6 7 8 9 10 0 1 QUANTITY (Admission tickets) 2 3 4 5 6 7 8 QUANTITY (Admission tickets) 9 10 Suppose that at first, Crystal charges the same price of $8 per admission in both markets so that the total number of admissions demanded tickets. is Suppose now that Crystal decides to charge a different price in each market. To maximize revenue, Crystal should charge $ Market A and $ per admission in Market B. At these prices, she will sell a total quantity of per admission in admission tickets per day. Complete the following table by calculating Crystal's total revenue from selling in both markets under the nondiscriminatory as well as the discriminatory price policy. Pricing Policy Nondiscriminatory Discriminatory Total Revenue (Dollars) Crystal charges a lower price in the market with a relatively price elasticity of demand. Grade It Now Save & Continue Continue without saving
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Crystal owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on her property, making a large crater. The event
attracts scientists and tourists, and Crystal decides to sell nontransferable admission tickets to the meteor crater to both types of visitors: scientists
(Market A) and tourists (Market B). The following graphs show daily demand (D) curves and marginal revenue (MR) curves for the two markets.
Crystal's marginal cost of providing admission tickets is zero.
20
18
16
14
12
10
10
PRICE (Dollars per ticket)
88
4
4
Market A
(?)
20
20
18
16
16
14
12
10
PRICE (Dollars per ticket)
9
4
Market B
?
2
2
MR
A
DA
MRB DB
0
0
0 1
2
3
4
5 6
7 8
9 10
0 1
QUANTITY (Admission tickets)
2 3 4 5 6 7 8
QUANTITY (Admission tickets)
9 10
Suppose that at first, Crystal charges the same price of $8 per admission in both markets so that the total number of admissions demanded
tickets.
is
Suppose now that Crystal decides to charge a different price in each market. To maximize revenue, Crystal should charge $
Market A and $
per admission in Market B. At these prices, she will sell a total quantity of
per admission in
admission tickets per day.
Complete the following table by calculating Crystal's total revenue from selling in both markets under the nondiscriminatory as well as the
discriminatory price policy.
Pricing Policy
Nondiscriminatory
Discriminatory
Total Revenue
(Dollars)
Crystal charges a lower price in the market with a relatively
price elasticity of demand.
Grade It Now
Save & Continue
Continue without saving
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