FINANCE

See HintHow much is total surplus if the market is perfectly competitive?
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Part 2   (0.3 point)

See HintHow much is total surplus if the market is controlled by a single-price monopolist?
 $

Part 3   (0.3 point)

See HintSuppose the single-price monopolist started charging all customers the maximum price they are willing to pay. How much additional surplus is created?
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Metropolitan Opera tickets are most expensive on Saturday night. Nevertheless, a very limited number of student rush tickets are often available, and a lucky student can wind up paying $20 for a $250 seat. The student rush tickets are available on a first-come, first-serve basis.

2nd attempt

Part 1   (0.3 point)

See HintWhy does the opera company offer these low-priced tickets?

Choose one or more:A. This creates a frenzy for last-minute student tickets.B. It wants students to have access to shows at a low price.C. It is able to sell seats that would otherwise go unsold.D. It knows that all students have an elastic demand for opera tickets.

Part 2   (0.3 point)

See HintHow does the opera company benefit from this practice?

Choose one or more:A. The Met is able to charge different prices to different groups, raising its profits.B. The Met can increase attendance among a group of people with more elastic demand by charging them a lower price.C. The Met is able to generate revenue from unsold seats without having to drop the price for nonstudents.D. The Met can effectively price-discriminate between students and nonstudents.

Part 3   (0.3 point)

See HintWhy are students, and not other groups of customers, offered the discounted tickets?

Choose one or more:A. In general, students have a more elastic demand.B. In general, students have a more inelastic demand.C. In general, students are more flexible and willing to buy tickets at the last minute.D. In general, students love opera.

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