1. Consider the problem of a discotheque that operates as a platform monopoly. T
ID: 1129405 • Letter: 1
Question
1. Consider the problem of a discotheque that operates as a platform monopoly. This discotheque works as a match maker between men and women. This is, men go to the disco to meet women and women go to the disco to meet men. Assume that the discotheque maximizes profits and that every Saturday there are 150 people inside, 75 men and 75 women. The ticket price is 20 euros for men and 10 euros for women. Assume that price elasticity of men is equal to price elasticity of women equal to 0.5. The marginal cost of having one more man in the disco is equal to the cost of having one more woman and it is constant.
a. If price elasticity is the same, should it not be the case that ticket price for men should be the same than ticket price for women?
b. Using the platform pricing model we saw in class find out by how much is different the utility of a woman for having one more man inside the disco versus the utility of a man of having one more woman inside the disco.
Explanation / Answer
a if price elasticity is same then ticket price for should be same as ticket price for women since price depends on elasticity and should be same for same elasticity.
B no one can answer b part till you also upload platform pricing model that you saw in class. Please upload it if you want to get answer
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