The Yankees have determined that there are three groups of buyers for their tickets. They have determined that the price elasticity of demand for group one is -1.02, for group two is -1.4, and for group three -2.1. The Yankees also know their marginal cost per ticket is $10. The Yankees want to practice price discrimination to maximize their profits. Determine the profit maximizing price that should be charged to each group of buyers© BrainMass Inc. brainmass.com March 4, 2021, 11:40 pm ad1c9bdddf
Price elasticity of demand for group 1=Ep=-1.02
Optimal Price for group 1= (Ep/(1 + Ep))* MC
Solution determines the profit maximizing price that should be charged to each group of buyers in consideration.