Economics

Subject: Economics

1.* The table below shows the monthly demand for movies for three individuals: Sandy, Elle and Joy.
Quantity(Movies/month)
Marginal Benefit
($/movie)    Sandy    Elle    Joy
10.00    0    0    0
7.50    1    0    0
5.00    2    1    0
2.50    3    2    1
0.00    4    3    2

a. Use this data to draw the demand curve for each individuals and for the market.

b. Use this data to calculate the price the firm sets if it must charge the same linear price to all customers. Assume marginal cost is 5 and that there is a zero fixed cost.

c. Now suppose the firm identify each customer, so can set a different linear price for each of them. (That is, it conducts third degree price discrimination.) What price would the firm charge each customer?

d. Compare the profit under the pricing strategy in part b and part c.

Place this order with us and get 18% discount now! to earn your discount enter this code: special18 If you need assistance chat with us now by clicking the live chat button.