Hys Cinemas is a monopolist with zero marginal cost who sells to two groups of c
ID: 2496068 • Letter: H
Question
Hys Cinemas is a monopolist with zero marginal cost who sells to two groups of consumers. Hys cannot distinguish customers from the two groups, but does know that group 1 has 2 members and group 2 has 4 members. Members of group 1 value the first ticket they purchase at $X > $2 and place no value on further tickets. Members of group 2 value the first ticket they purchase at $X - $2, the second at $X + $6, and place no value on further tickets. Hys Cinemas can maximize profits by using which of the following non-linear price strategies? consumers pay $X + $4 for the first unit, and $X + $2 dollars for the second unit consumers pay $X for the first unit, and $X - $2 dollars for the second unit consumers pay $X + 6 dollars for the first unit, and $X - $2 for the second unit consumers pay $X for the first unit, and $X + $4 for the second unitExplanation / Answer
Answer:
Hys cinemas is a monopolist with zero marginal cost who sells to two groups of consumers.
Group 1 has 2 members, and group 2 has 4 members
Members of group 1 value the first ticket they purchase at $X > $2, and place no value on further tickets, means that the consumer can purchase maximum one ticket.
Member of group 2 value the first ticket they purchase at $X - $2, the second at $X + $6, and place no value on further tickets, means that the consumer can purchase maximum $X - $4 tickets.
Therefore, Hys Cinemas can maximize profits by:
d) Consumer pay $X for the first unit, and $X - $4 for the second unit.
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