Posted by Brad on .
Suppose that a movie theater owner faces the demand curve given by P=10-.001Q where P is the price of a ticket in dollars and Q is the number of tickets sold per week. Suppose that all the cost associated with the theater other than film costs do not vary with the number of tickets sold.
4a. What price will the theater owner charge if she must pay a fee of $12,000 per week to rent the movie?
4b. What price will she charge if she must pay $4 per ticket to the film distributor?
4c. What price will she charge if she must pay 80% of her revenues to the distributor?
4d. How much revenue will she get ($12,000 per week rental) if she can perfectly price discriminate?
Can you please tell me how to break each problem down.