Suppose there are three types of consumers who attend concerts at your university’s performing arts center: students, staff, and faculty. Each of these groups has a different willingness to pay for tickets; within each group, willingness to pay is identical. There is a fixed cost of $1,000 to put on a concert, but there are essentially no variable costs. For each concert:
• There are 140 students willing to pay $20.
• There are 200 staff members willing to pay $35.
• There are 100 faculty members willing to pay $50.
a. If the performing arts center can charge only one price, what price should it charge? $.
b. What are profits at this price? $.
c. If the performing arts center can price-discriminate and charge two prices, one for students and another for faculty/staff, what are its profits? $.
d. If the performing arts center can perfectly price-discriminate and charge students, staff, and faculty three separate prices, what are its profits? $.