What prices will the eye doctor charge for senior residents

Reference no: EM13219316

Suppose that the eye doctor offers senior residents a discounted price for an eye exam. The demand function for senior residents is Qs = 50 - Ps, and the demand function for the general public is Qg = 60 - Pg. The marginal cost for an eye exam is constantly $30. (a) Given that the marginal revenue curve for senior residents is Ps = 50 - 2Qs, and the marginal revenue curve for the general public is Pg = 60 - 2Qg, what prices will the eye doctor charge for senior residents and the general public to maximize profits? (b) Calculate the price elasticity of demand for each group at current prices (Hint: Qs/Ps = -1 and ?Qg/?Pg = -1). (c) Compare the price and price elasticity of demand for each group in part (a) and (b), can you conclude the optimal rule for charging prices to each group when practicing third-degree price discrimination?

Reference no: EM13219316

Questions Cloud

Why daimlerchrysler would discontinue the jeep liberty : DaimlerChrysler has asked your company and your only rival to simultaneously submit a price quote for supplying 100,000 front and rear windshields for its new Jeep Liberty. If both you and your rival submit a low price.

Draw the circuit : A majority function is generated in a combinational circuit when the output is equal to 1 if the input variables have more 1's than 0's. The output is 0 otherwise. Design a 3-input (A, B, C) majority function. Use K-maps to simplify the circuit. D..

Compute the probability the outstanding credit card balance : Suppose that the average outstanding credit card balance for young couples is $650 with a standard deviation of $ 420. If a couple is selected at random, what is the probability the outstanding credit card balance exceeds $ 700?

Processes of digestion and respiration : Create a PowerPoint presentation of 10-12 slides that summarizes the processes of digestion, respiration, and circulation and how they are interrelated. Each process should be outlined in 2-4 slides.

What prices will the eye doctor charge for senior residents : Suppose that the eye doctor offers senior residents a discounted price for an eye exam. The demand function for senior residents is Qs = 50 - Ps, and the demand function for the general public is Qg = 60 - Pg. The marginal cost for an eye exam is ..

Organism’s behavior or capabilities : The process by which experience produces a relatively enduring change in an organism’s behavior or capabilities is called

Determine free electron and hole concentration : (a) Determine free electron and hole concentration.(b) Calculate the effective density of states at valence band, Nv. Given that ni = 1x1010 cm3 and kT = 0.026.

How did consumers make buying decisions : Prior to the introduction of the Swatch, what kinds of watches were popular among consumers? In what ways was a Rolex different from a Timex, or from a gold-plated Seiko? How did consumers make buying decisions?

What is the relative permittivity er of the dielectric : Will the electric field inside change (how much if yes)? Will the stored energy in the capacitor change (how much if yes)?

User Account

All Pages