A movie theater faces the following hourly inverse demand curves:
Seniors: P_s = 12 - 0.5Q
Adults: P_a = 19 - Q
The marginal cost is constant at $1. If the movie theater uses segmenting, the ticket price charged to adults is $____.

Question

Quizplus · Accepted Answer

The correct answer is A.The profit-maximizing quantity for seniors is Qs = 10, and the profit-maximizing price for seniors is Ps = 7. The profit-maximizing quantity for adults is Qa = 9, and the profit-maximizing price for adults is Pa = 10.

A Movie Theater Faces the Following Hourly Inverse Demand Curves