Consider the following scenario to answer the following questions: EJH Cinemas,a movie theater next to your university,attracts two types of customers-those who are associated with the university (students,faculty,and staff)and locals who live in the surrounding area.There are 10,000 university customers interested in purchasing movie tickets from EJH Cinemas,with a maximum willingness to pay of $7 per ticket.There are 20,000 local customers interested in purchasing tickets,with a maximum willingness to pay of $9 per ticket.The movie theater incurs a constant marginal cost of $4 per ticket.For simplicity,assume each customer purchases,at most,one ticket.
-If EJH Cinemas decides to practice price discrimination,charging $9 for a standard ticket available to everyone,but only $7 for a ticket if you show your university identification (students,faculty,and staff),what will be the movie theater's total revenue?
A) $250,000
B) $200,000
C) $180,000
D) $170,000
E) $150,000

Question

Quizplus · Accepted Answer

The total revenue from university customers (10,000 customers at $7 each) is $70,000. The total revenue from local customers (20,000 customers at $9 each) is $180,000. Adding these together gives a total revenue of $250,000.

Consider the Following Scenario to Answer the Following Questions: EJH