Ex 25-3 differential analysis for a discontinued product obj. 1 a condensed income statement by product line for celestial beverage inc. indicated the following for star cola for the past year: sales $390,000 cost of goods sold 184,000 gross profit $206,000 operating expenses 255,000 loss from operations $ (49,000) it is estimated that 20% of the cost of goods sold represents fixed factory overhead costs and that 30% of the operating expenses are fixed. because star cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued

Suppose there are three types of consumers who attend concerts at your university’s performing arts center: students, staff, and faculty. each of these groups has a different willingness to pay for tickets; within each group, willingness to pay is identical. there is a fixed cost of $1,000 to put on a concert, but there are essentially no variable costs. for each concert: i. there are 140 students willing to pay $20. (ii) there are 200 staff members willing to pay $35. (iii) there are 100 faculty members willing to pay $50. a) if the performing arts center can charge only one price, what price should it charge? what are profits at this price? b) if the performing arts center can price discriminate and charge two prices, one for students and another for faculty/staff, what are its profits? c) if the performing arts center can perfectly price discriminate and charge students, staff, and faculty three separate prices, what are its profits?