Use the following information to answer the following questions: The accompanying figure depicts the demand (D)curve for general admission concert tickets to see ECON-Jammin',the world's first economics rock band,which is scheduled to visit your city next month.The concert venue can accommodate 100 fans with a marginal cost (MC)of $10 per person.

-ECON-Jammin' has recently discovered that its fans are made up of two distinct groups that can be easily distinguished.The band has decided to utilize its economic knowledge and offer a high-priced ticket of $40 per person and a low-priced ticket of $20 per person.Based on this information,what is the gain in net revenue from using price discrimination versus a single-price model?
A) $200
B) $150
C) $100
D) $50
E) $0

Question

Use the following information to answer the following questions: The accompanying figure depicts the demand (D)curve for general admission concert tickets to see ECON-Jammin',the world's first economics rock band,which is scheduled to visit your city next month.The concert venue can accommodate 100 fans with a marginal cost (MC)of $10 per person.
 
-ECON-Jammin' has recently discovered that its fans are made up of two distinct groups that can be easily distinguished.The band has decided to utilize its economic knowledge and offer a high-priced ticket of $40 per person and a low-priced ticket of $20 per person.Based on this information,what is the gain in net revenue from using price discrimination versus a single-price model?
A) $200 
B) $150 
C) $100 
D) $50 
E) $0

Quizplus · Accepted Answer

Price discrimination allows the band to capture more consumer surplus by charging different prices to different groups of consumers, thus increasing net revenue compared to a single-price model where they might have to choose a price that does not maximize revenue from both groups.

Use the Following Information to Answer the Following Questions: the Accompanying