A monopolistic cinema sells tickets to both college students and other adults. The demand function for students is
Q(d) = 800-100P for students
and the demand function for other adults is:
Q(d)= 1600 -100P for adults.
The total cost function of the monopolist is:
C(Q) = Q+0.005*Q^2.
1. Compute the equilibrium levels of prices and quantities of tickets for the two categories of customers. Calculate its profit and the surplus of the two categories of customers.
2. Repeat computations in 1. when the demand for adults increases to Q(d)= 1800 -100P?
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