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“You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money.

“You live in a town with 300 adults and 200 children, and you are thinking about putting on a play to entertain your neighbors and make some money. A play has a fixed cost of $2,000, but selling an extra ticket has zero marginal cost. You have no competitors. The demand schedules for your two types of customer are below.a. To maximize profit, what price would you charge for an adult ticket? For a child’s ticket? How much profit do you make? Show work.b. The city council passes a law prohibiting you from charging different prices to different customers. What price do you set for a ticket now? How much profit do you make? Show work.c. Calculate the change in consumer surplus between parts a and b. Show work.Price Adults Children00000100200200200200200

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(a)Price109876543210 Adults0100200300300300300300300300300 Revenue(adults)0900160021001800150012009006003000 Price Children 109876543210 00000100…

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