Question: Problem 1: Suppose that in Burlington, the inverse demand function for movies

is P = 250-Q₁ for college students and P = 200- 1/2Q₂ for the rest of Burlington’s residents.

Suppose also that there are three movie theaters in town with a total capacity of 632 seats.

A) What is the market demand for movies in Burlington?

B) Determine the price that clears the market. How much do college students and other residents spend in movies.

C Compute demand price elasticity at the equilibrium point. What is the supply price elasticity? if a tax of $1 dollars per movie ticket were levied, who would pay higher fraction of the tax?