Question

A movie theater sells tickets to both students and adults. Below is the information about how much each potential buyer is willing to pay for a movie ticket:

STUDENTS

Name	Maximum Price Willing to Pay
Alex	$4
Bob	$5
Carmen	$6

ADULTS

Name	Maximum Willingness to Pay
Don	$8
Emma	$9
Fred	$10

If the movie theater set the price at $5 for everyone, and therefore five people buy tickets (Bob, Carmen, Don, Emma, and Fred), its total revenue would be $____.

If the movie theater sets the price at $4 for students and $8 for adults, so that everyone buys a ticket, its total revenue would be $____ .

If the movie theater could charge each person their maximum willingness to pay, its total revenue would be $____ .

Question 2 24 pts

Consider the payoff matrix below. For what values of X and Y will Left be the Column Player's dominant strategy?

		Column Player
		Left	Right
Row Player	Up	5, X	2, 3
	Down	1, Y	4, 0

Payoff X must be    "select" (greater than or equal to, Less than or equal to) and then "select" ["0", "1", "2", "3", "4", "5"]

Payoff Y must be "select"   [ greater than or equal to, Less than or equal to] and then "select" ["0", "1", "2", "3", "4", "5"]      

Question 3 6 pts

When a market is in equilibrium, when does it generate an efficient outcome for society, and
when does it fail to do so? Explain, using supply and demand diagrams, and examples from the
real world.

This may be a handwritten paper that you scan or photo (it must be readable), or you could type your explanation into a document with your graphs inserted.

Answer 1

Q1)

When P = 5, 5 people buy

So TR = 5*5= 25 $

• 4 for students & 8 for adults, then

TR = 4*1 + 8*3 = 4+24

= $ 28

• TR = 4+5+6+8+9+10

= $ 42

2)

X must be greater than 3

Y must be greater than zero

Matrix

	Left	right
Up	(5,X•)	(2,3)
Down	(1,Y•)	(4,0)

Left will be dominant strategy if column player always gets the higher pay off from left rather than right , for any action choice of row player.

So x > 3, & y > 0

.

It's its mandatory to solve first question as per guidelines