The Star Theater has two distinct types of customers:
(i)senior citizens and (ii)non-senior citizens.The demand curve among senior citizens is:y1=100−10p1,for p1≤10, where y1 is the number of seats demanded by senior citizens at a senior citizen ticket price of p1.The demand curve among non-senior citizens is: y2=140−10p2, for p2≤14, where y2 is the number of seats demanded by non-senior citizens at a non-senior citizen ticket price of p2.The Star Theater's cost function is C(y1,y2)=C(y1+y2)=F+(y1+y2), where F is the fixed cost of operating the theater and y1and y2 are (as already defined) the number of senior citizen and non-senior citizen customers, respectively.
What common ticket price does the Star Theater set for both types of customers if it operates as a profit-maximizing single-price monopolist?
a.p∗ = 7.50
b.p∗ = 8.50
c.p∗ = 6.50
d.p∗ = 5.50
