Business, 27.06.2020 03:01 leigha54

College students have a reservation price of $22 for movie tickets. Senior citizens have a reservation price of $20. If the price of a movie ticket is $20 or less, then 15 senior citizens will demand a ticket. However, no senior citizens will demand a ticket at prices above $20. If the price of a movie ticket is $22 or less, then 15 college students will demand a ticket. However, no college students will demand a ticket at prices above $22. Given the information in the table, if a movie theater does not price discriminate, then it charges either the highest price the college students are willing to pay or the one that the senior citizens are willing to pay. Why doesn't it charge an intermediate price? (Hint: Discuss how the demand curves of these two groups are unusual). The theater would practice price discrimination by charging college students $22 and senior citizens $20. Profit from 15 College Students Profit from 15 Senior Citizens Total Profit Uniform, $20 $300 $300 $600 Uniform, $22 $330 $0 $330 Price Discrimination $330 $300 $630 When not price discriminating, the firm does not charge an intermediate price (e. g., a price between $20 and $22) because at prices above $20 and below $22

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