Seven potential customers are interested in seeing a movie. Since the marginal cost of admitting additional customers is zero, the movie theater maximizes its profits by maximizing its revenue a. What...

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Seven potential customers are interested in seeing a movie. Since the marginal cost of admitting additional customers is zero, the movie theater maximizes its profits by maximizing its revenue

a. What price would the theater charge if it could only charge one price?

b. If the theater could charge two prices, what prices would it choose? Which customers would pay the higher price, and which would pay the lower price?

Answered Same DayDec 26, 2021

Answer To: Seven potential customers are interested in seeing a movie. Since the marginal cost of admitting...

Robert answered on Dec 26 2021

123 Votes

Given,
a) Since MC of admitting a extra customer is zero, so the theater would charge such a price that the
all customers could be accomodated. In this example since the minimum price / smallest maximum
willingness to pay is $6. the theater would charge $6 as ticket price
b) If teh theater...

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Seven potential customers are interested in seeing a movie. Since the marginal cost of admitting additional customers is zero, the movie theater maximizes its profits by maximizing its revenue a. What...

Answer To: Seven potential customers are interested in seeing a movie. Since the marginal cost of admitting...

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