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 $2,000, but selling an extra ticket has zero marginal cost. Here are the demand schedules for your two types of customers: Price Adults Childrern
(Dollars) (Tickets) (Tickets)
20 0 0
18 25 0
16 50 0
14 100 0
12 150 0
10 200 0
8 300 25
6 300 50
4 300 100
2 300 150
0 300 200
To maximize profit, you would charge$ for an adult's ticket and$ for a child's ticket. Total profit in this case would be The city council passes a law prohibiting you from charging different prices to different customers
Now you set a price of $ for all tickets, resulting in profit.