Internet Service in the Local Market Is Supplied by Laura's

question 85

Essay

Internet service in the local market is supplied by Laura's Internet Service. Laura has two types of consumers. The first type of customers is local businesses, and the elasticity of business demand at current prices and quantity is -1.25. The second type is residential customers, and the elasticity of residential demand at current prices and quantity is -4. Laura is charging business users $50 per unit of service while she charges residential customers $17.50 per unit. Can we determine if Laura is maximizing profits?

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Definitions:

Negative Reinforcement

A process in behavior modification where the removal of an unpleasant stimulus strengthens a behavior.

Cumulative Recorder

A device used in behavioral psychology to record the frequency of behavior over time, visually displaying the accumulation of responses.

Response Rate

The frequency or rate at which a specific behavior or action is performed, often measured in psychological experiments or surveys.

Stimulus Generalization

The psychological phenomenon where a response learned from one stimulus is elicited by similar, but distinct, stimuli.