Why doesn’t it charge an intermediate price

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Can Table 12.1 be modified so that the movie theater in Solved Problem 12.1 does not earn more by perfectly price discriminating than by charging a single price? What changes to the table would increase the extra profit from perfectly price discriminating?

Problem 12.1

In the examples in Table 12.1, if the movie theater does not price discriminate, 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.)

Table 12.1

Reference no: EM131345381

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