49:I[79858,["1216","static/chunks/eeac573e-cfb1e84259e7dde2.js","4649","static/chunks/4649-d659720c90d9ee35.js","6404","static/chunks/6404-6ef05b8bff2887b0.js","4797","static/chunks/4797-e81dc81e0c1c1336.js","2972","static/chunks/2972-ab992f8c79eda392.js","4296","static/chunks/4296-8f39ea5654a4f1ab.js","4235","static/chunks/4235-6fd3b88ee1c357a0.js","960","static/chunks/960-4945c17e7bdffd04.js","866","static/chunks/866-36e9a2593ae60457.js","6501","static/chunks/app/%5BsubjectLabel%5D/problems/%5BproblemHash%5D/page-756d64521be57e67.js"],"ProblemPageMemo"] 4a:T4cb,

In Moscow, there exists a restaurant chain that uses the following pricing mechanism.

A consumer must pay some entrance fee, after that they can order whatever they want for the price that is equal to the cost of ingredients. The price of an entry ticket depends on the time of the day (being higher in the evening than in the morning), but prices of menu items remain the same and are very low for Moscow standards.

For instance, a portion of pasta costs only about $2–2.5, the price of a ribeye steak is about $4, a burger with grilled tiger prawns and arugula can be purchased for merely $3. For only $3–4 a customer can drink a glass of decent wine. These prices are very low compared to other restaurants in the city. Customers must eat and drink inside; if they want to take something away, the price doubles.

a) (15 rp) One of the well-known models of price discrimination explains how similar pricing scheme can be profitable for a seller (for instance, in Disneyland entrance fee is high while using most of its facilities is free). Using this model, explain, how such pricing technique helps this restaurant maximize profits (use graphical analysis where appropriate).

4b:T593,

Two things are important here:

1. Different entry fees for different times of the day. This works because in the evening and at night people are ready to pay more in restaurants. This is because they most likely want to have a fancy