Suppose that a small-town theater has six potential customers and is looking to implement price discrimination depending on when customers want to attend. Suppose the marginal cost of serving an additional customer is $1.50. The data provide information about the Maximum willingness Time of Customer to pay attendance Brandon $4 matinee Tyler $35 evening time of attendance and willingness to pay for a ticket. Austin $10 evening Alexis $7 matinee Ashley $12 evening Emily $12 matinee What should the theater charge for evening tickets? 20 Incorrect What should the theater charge for matinee tickets? 24 7
Suppose that a small-town theater has six potential customers and is looking to implement price discrimination depending on when customers want to attend. Suppose the marginal cost of serving an additional customer is $1.50. The data provide information about the Maximum willingness Time of Customer to pay attendance Brandon $4 matinee Tyler $35 evening time of attendance and willingness to pay for a ticket. Austin $10 evening Alexis $7 matinee Ashley $12 evening Emily $12 matinee What should the theater charge for evening tickets? 20 Incorrect What should the theater charge for matinee tickets? 24 7
Chapter18: Asymmetric Information
Section: Chapter Questions
Problem 18.3P
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