Plato Playhouse, a theatre company in the university town of Wegg, caters to two groups of customers:
students and the non-student population.
Figure 15-16 shows the demand curves for the two groups of customers.
-Refer to Figure 15-16. Suppose Plato Playhouse charges a single price of Pd for each performance. Which of the following statements is true?
A) The company is selling more than the profit-maximizing quantity in the non-student market and less than the profit-maximizing quantity in the student market.
B) The company is selling less than the profit-maximizing quantity in the non-student market and more than the profit-maximizing quantity in the student market.
C) The company is selling less than the profit-maximizing quantity in both markets but it is maximizing its revenue.
D) The company is selling less than the profit-maximizing quantity in both markets.
Correct Answer:
Verified
