I NEED HELP FILLING IN THE 6 GRAY BOXES, & THE QUESTION BELOW THE CHART (DROP DO
ID: 1202196 • Letter: I
Question
I NEED HELP FILLING IN THE 6 GRAY BOXES, & THE QUESTION BELOW THE CHART (DROP DOWN OPTIONS FOR THIS IS PROVIDED BELOW). PLEASE BE CLEAR AND ORGANIZED IN THE EXPLANATION & ANSWER FORMAT. THANK YOU VERY MUCH!
8. Price-discriminating monopolist Van owns a plot of land in the desert that isn't worth much. One day, a giant meteorite falls on his property, making a large crater. The event attracts scientists and tourists, and Van 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. Van's marginal cost of providing admission tickets is zero Market A Market B 20 18 16 14 20 18 16 14 12 G 10 10 4 4 MR MRR D 0 3 6 9 12 15 18 21 24 27 30 QUANTITY (Admission tickets) 0 3 6 9 12 15 18 21 24 27 30 QUANTITY (Admission tickets)Explanation / Answer
The total number of admissions demanded = 18+6
The total number of admissions demanded = 24
Van should charge $ 10 in market A and $ 6 in market B .
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Val charges a lower price in the market with a relatively HIGH price elasticity of demand
Price elasticity of demand = % change in quantity demanded/ % change in price
For market A between price of 10 & 8 , the % change in price = 20%
% change in quantity demanded= 41.66
Price elasticity of demand = 41.66/20
Price elasticity of demand = 2.083 ( elastic demand)
Market A Market B price quantity revenue quantity revenue 0 30 0 18 0 2 27 54 15 30 4 24 96 12 48 6 21 126 9 54 8 18 144 6 48 10 15 150 3 30 12 12 144 0 0 14 9 126 16 6 96 18 3 54 20 0 0Related Questions
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