Suppose There Are Three Types of Concertgoers at Symphony Hall

question 2

Essay

Suppose there are three types of concertgoers at symphony hall.Staff number 30 and are willing to pay $50.Students number 20 and are willing to pay $30.Music lovers number 50 and are willing to pay $70.The cost of the concert is $500.The hall must charge in increments of $5 (that is,$20 or $25,but not $23),and wants to maximize revenue.
a.If symphony hall can charge only one price,how much revenue is earned?
b.If symphony hall can perfectly price discriminate,how much revenue is earned?

---

Definitions:

Payoff Matrix

A strategic analysis tool used in decision theory and game theory that shows the potential outcomes and payoffs from different decisions made by two or more players.

First-Mover Advantage

The competitive edge that a company gains by being the first to market with a product or service.

Extensive Form

A representation of a game that displays the sequence of choices available to players and the outcomes achieved from these choices.

Sequential Game

A type of game in game theory where players make decisions or take actions in turn, with each player's decision influencing the next player's set of available choices.