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Suppose there are two market segments for Caribbean cruises: elderly people with a demand curve QE = 750 ? 4PE, and younger people with a
Suppose there are two market segments for Caribbean cruises: elderly people with a demand curve QE = 750 ? 4PE, and younger people with a demand curve QY = 850 ? 2PY . Assume that a certain cruise ship can hold 500 passengers, and that the marginal cost for a passenger of any type is MC = 40. If the cruise company is able to price discriminate, what is the profit-maximizing number of passengers of each type? What is the profit-maximizing price for each type of passenger? Explain your reasoning.
Suppose there are two market segments for Caribbean cruises: elderly people with a demand curve QE = 750 ? 4PE, and younger people with a demand curve QY = 850 ? 2PY . Assume that a certain cruise ship can hold 500 passengers, and that the marginal cost for a passenger of any type is MC = 40. If the cruise company is able to price discriminate, what is the profit-maximizing number of passengers of each type? What is the profit-maximizing price for each type of passenger? Explain your reasoning.
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