Consider the La Strada restaurant problem above and assume that the cost of the lunch is $5. Now assume that the restaurant classifies anybody with WTP more than $7.5 as a high-paying customer; the rest are considered low-paying customers. The restaurant will offer la cart service to high-paying customers and a lunch buffet to low-paying customers. We again denote, by dH and dL, the demand for highpaying and low-paying customers, respectively. It can be shown that dH(p)=12510pfor7.5p12.5dL(p)=7510pfor2.5p7.5. The restaurant knows that the difference between the prices for the two segments has to be less than or equal to $1.50 in order to effectively eliminate cannibalization. So, find the optimal prices: pH=andpL= for high-paying and low-paying markets, respectively, such that pHpL1.5