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banggedung banggedung
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5 years ago Edited: 5 years ago, bio_man
Figure 16-2


Plato Playhouse, a theatre company in the university town of Wegg, caters to two groups of customers:
students and the non-student population.
Figure 16-2 shows the demand curves for the two groups of customers.



Refer to Figure 16-2. Suppose Plato Playhouse price discriminates. Which of the following statements is true?

• By charging two different prices, the theatre company has redistributed some profits from those who can pay higher prices to those who cannot, thereby increasing economic efficiency.

• By charging two different prices, the theatre company essentially allows those willing to pay higher prices to subsidize those who are not.

• By charging two different prices, the theatre company has redistributed some profits from those who can pay higher prices to those who cannot, thereby improving equity.

• Plato Playhouse will earn higher profits if it charges a single price—an average of the two prices— instead of charging two different prices to the two different groups of customers.
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Microeconomics

Microeconomics


Edition: 7th
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Cele_1015Cele_1015
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