Answer to Question #83283 in Microeconomics for sharanjeet

Question

s] Kal is considering going to a new Superhe
ro movie. The price of the movie
ticket is $12, and the movie is 120 minutes long. K
al’s “demand” for watching minutes of
the movie (in dollar value) is:
p=0.4-(1/240)m
where m is the number of minutes of the movie he wa
tches.
If Kal leaves up to and including 30 minutes into t
he movie, the cinema will return his
entire $12. If Kal leaves between 30 and up to 60 m
inutes, the cinema will only return
$6 of his ticket. However, if Kal stays longer than
60 minutes, he cannot get back any of
his ticket price.
(a)
[3 marks] Draw Kal’s demand curve. What is the high
est price that he
would have
paid for the movie (assuming that he would stay til
l the end)?
(b)
[5 marks] For how long will Kal stay in the cinema?
Explain your answer

Answer 1

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