Figure 16-2

Plato Playhouse, a theatre company in the university town of Wegg, caters to two groups of customers: students and the non-student population.Figure 16-2 shows the demand curves for the two groups of customers.
-Refer to Figure 16-2.What is the price charged in the two markets?
A)price in the student market = price in the non-student market = Pₐ
B)price in the student market = price in the non-student market = Pb
C)price in the student market = Pd; price in the non-student market = Pₑ
D)price in the student market = Pc; price in the non-student market = Pₑ

Question

Figure 16-2
  
Plato Playhouse, a theatre company in the university town of Wegg, caters to two groups of customers: students and the non-student population.Figure 16-2 shows the demand curves for the two groups of customers.
-Refer to Figure 16-2.What is the price charged in the two markets?
A)price in the student market = price in the non-student market = Pₐ 
B)price in the student market = price in the non-student market = Pb 
C)price in the student market = Pd; price in the non-student market = Pₑ 
D)price in the student market = Pc; price in the non-student market = Pₑ

Quizplus · Accepted Answer

The price charged in the student market is Pc, where the demand curve intersects with the marginal cost curve. The price charged in the non-student market is Pₑ, where the demand curve intersects with the marginal cost curve. Therefore, the best choice is D.

Figure 16-2 Plato Playhouse, a Theatre Company in the University Town of in the University