Suppose a movie theater determines that the elasticity of demand for movie tickets is -2.0 for seniorcitizens and –1.5 for adults under age 65, and the marginal cost is $4 per consumer. Use the Lerner index todetermine the price senior citizens should be charged and the price adults under age 65 should be charged inorder to maximize profits

Suppose a movie theater determines that the elasticity of demand for movie tickets is -2.0 for seniorcitizens and –1.5 for adults under age 65, and the marginal cost is $4 per consumer. Use the Lerner index todetermine the price senior citizens should be charged and the price adults under age 65 should be charged inorder to maximize profits

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 3SQP

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