A cruise line has space for 500 passengers on each voyage. There are two market segments: elderly

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A cruise line has space for 500 passengers on each voyage. There are two market segments: elderly passengers and younger passengers. The demand curve for the elderly market segment is Q1 = 750 - 4P1. The demand curve for the younger market segment is Q2 = 850 - 2P2. In each equation, Q denotes the number of passengers on a cruise of a given length and P denotes the price per day. The marginal cost of serving a passenger of either type is $40 per person per day. Assuming the cruise line can price discriminate, what is the profit-maximizing number of passengers of each type? What is the profit-maximizing price for each type of passenger?
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Microeconomics

ISBN: 978-0073375854

2nd edition

Authors: Douglas Bernheim, Michael Whinston

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