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April 18, 2014

Homework Help: Economics

Posted by Ronald on Tuesday, March 20, 2012 at 10:50pm.

The price elasticity of demand for senior citizens purchasing coffee from McDonald's is -5 while non senior citizens have a price elasticity of demand equal to -1.25. If is cost McDonald's $0.02 to produce a coffee, the optimal price for a cup of coffee for non senior citizens and resultant marginal cost under third-degree price discrimination are


A. $0.004 and $0.02.

B. $0.02 and $0.80.

C. $0.10 and $0.02.

D. $10 and $0.20.

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