Seven potential customers are interested in seeing a movie. Since the marginal cost of admitting additional customers is zero, the movie theater maximizes its profits by maximizing its revenue:Customer Maximum willingness to Pay AgeAllison $8 66Becky 11 34Charlie 6 45David 7 16Erin 6 9Franco 10 28Grace 9 14a. What price would the theater charge if it could only charge one price? b. If the theater could charge two prices, what prices would it choose? Which customers would pay the higher price, and which would pay the lower price?

a) 6 dollar per ticked

b) from 25 to 35 the young adult will be charged with a higher price whilethe other groups, elderly, teenagers and children with a minimum price of 6

Explanation:

Erin $ 6 9

Grace $ 9 14

David $ 7 16

Charlie $ 6 45

Allison $ 8 66

Franco $ 10 28

Becky $ 11 34

a) the max revenue comes from charging 6 dollar per ticket:

7 people x 6 dollar = 42 dollars

if we charge more like seven dollar then, we lose two customer and we don't make up for that lose:

5 people x 7 dollars = 35 dollars

b) the young-adult group will be the target to price discrimination they will be charged with 10 dollars if the cinema could do it.