You Are the Manager of a Gas Station in a Small

question 78

Essay

You are the manager of a gas station in a small town,and your goal is to maximize profits.Based on your experience,the elasticity of demand of Texans for a car wash is -2,while that of non-Texans is -1.5.Your marginal cost is $6.
a.Are the conditions necessary for price discrimination to be an effective means of enhancing profits being met?

b.What is the profit-maximizing price to charge a Texan for a car wash?
c.What is the profit-maximizing price to charge a Californian for a car wash?

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Definitions:

San Andreas Fault

A major geological fault in California formed by the boundary between the Pacific and North American tectonic plates, known for causing significant earthquakes.

Density Profile

The variation of density within a substance or object as a function of its composition or structure, often used in geological contexts to understand earth or planetary interiors.

Streambed

The bottom of a stream or river channel where water flows; composed of sediment and particles that are transported by the stream.

Uppermost Layer

Refers to the topmost layer of a material or structure, such as the Earth's surface or the atmosphere.