Question
Disney World management has learned that potential visitors from Florida are much more price sensitive than visitors from other states.Suppose that marginal cost for each
Disney World management has learned that potential visitors from Florida are much more price sensitive than visitors from other states.Suppose that marginal cost for each visitor is $10, whereas elasticity of demand for Florida visitors is -4 and elasticity of demand for all other visitors is -2.How much should Disney World charge each group of customers?
A.Price should be $13 for Florida residents, $20 for all others
B.Price should be $20 for all visitors, regardless of where they come from
C.Price should be $10 for all visitors, regardless of where they come from
D.Price should be $20 for Florida residents, $13 for all others
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