A Profit-Maximizing Skeet Club Segments Its Market

question 88

Multiple Choice

A profit-maximizing skeet club segments its market. It charges juniors $4 per round based on their price elasticity of demand of -2.0. Its adult shooters have a price elasticity of demand of -1.4. The marginal cost per round does not vary by the shooter's age. What price does the skeet club charge adult shooters?

• A) $7
• B) $8
• C) $6
• D) $5.75

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Definitions:

Sample Proportion

The fraction or percentage of a sample possessing a particular property or characteristic.

Standard Error

The standard deviation of the sampling distribution of a statistic, most commonly of the mean.

Confidence Interval

A range of values, derived from sample statistics, that is likely to contain the value of an unknown population parameter.

Population Proportion

Refers to the fraction or percentage of individuals in a population having a particular property or characteristic.