The following table summarizes six potential customers’ ages and willingness to
ID: 1127454 • Letter: T
Question
The following table summarizes six potential customers’ ages and willingness to pay for a solo skydiving experience from SkyMasters. The aircraft has room for eight people, including the pilot and skydiving instructor. The marginal cost of adding each additional passenger is $100. SkyMasters holds significant market power for its region.
Use this information to answer the following questions:
If SkyMasters decides to price discriminate based on age, which customer(s) will not skydive based on the price that should be offered to that particular age group?
The markets for factors of production differ from markets for products in an important aspect because
For a firm to be able to practice price discrimination, it must be a
Total utility after the second cupcake is
Customer Maximum Willingness to Pay Age Harold $400 50 Leslie $350 42 Jay $300 45 Kristen $250 21 Ivana $200 20 Matt $150 18 Marginal Utility 30 25 20 15 10 5 0 2 3 4 5 6 78 9 Number of CupcakesExplanation / Answer
(1) Answer is E , Matt will not sky dive because his willingness to pay and MC has only difference of $50 . So increase in price would decrease his consumer surplus .
(2) Answer is B because of it both market s are differ.
(3) Answer is A . A price maker firm can charge the prices at its wishes then only price discrimination is possible.
(4) Answer is C . By taking second cup his MU is 25 and from first cup his MU is 30. So by one addition cup his TU would be 55
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