Explore BrainMass
Share

Explore BrainMass

    Marginal Cost

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    I need clarification

    The price elasticity of demand for senior citizens purchasing coffee from the coffee shop is -5 while non senior citizens have a price elasticity of demand equal to -1.25. If it cost the coffe shof $0.02 to produce a coffee, the optimal price for a cup of coffee for senior citizens and resultant marginal cost under third-degree price discrimination are, respectively,
    A. $0.016 and $0.20
    B. $0.02 and $0.80
    C. $0.025 and $0.02
    D. $0.10 and $0.02

    please show calculations

    © BrainMass Inc. brainmass.com October 9, 2019, 9:42 pm ad1c9bdddf
    https://brainmass.com/economics/elasticity/marginal-cost-price-elasticity-194859

    Solution Summary

    Marginal Cost is emphasized.

    $2.19